KUALA LUMPUR: Affin Hwang Research has maintained its Buy call on Scicom with a target price of RM2.56 on higher revenue and better margins for its 1QFY15, based on 20 times CY15 EPS.
In a note on Tuesday, the research house said it liked Scicom for strong growth prospects as its concession earnings from EMGS run at full steam – FY14-17 EPS CAGR of 28%, highly scalable and replicable business and strong business franchise as client base include a diverse range of global MNCs; and 4) decent dividend yields of c. 4%.
Separately, at the EGM yesterday, shareholders gave approval to its proposed 1:5 bonus issue, of which the entitlement date has been set at 27 November 2014, it said.
"We remain positive on the earnings outlook for Scicom which will be underpinned by stable earnings from its traditional BPO business, but much faster growth from its EMGS segment in tandem with a rising number of foreign student visa applications.
"The increasing contribution from the higher margin EMGS segment should also help spur our projected 60% EPS growth rate for FY15," it noted.
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