GHLSYS – MYR0.655 SHORT-TERM BUY (TECHNICAL)
(Stock Code: 0021) (Bloomberg Code: GHLS MK Equity)
below: GHLSYS Weekly Chart (click to enlarge) GHLSYS made a major weekly Wave 4 low of MYR0.31 (Aug 2013) with grossly oversold and bullish signals. All its positive signals above suggest a strong daily Wave 5 uptrend. It is likely to break into higher territory, as it breached its key resistance areas in a clear upward Wave 5 move (of a larger “Flat” rise). Short-term buy on dips for GHLSYS, with very firm supports and clear upward target areas of MYR0.69, MYR0.76 and MYR1.03. Stop-loss is at MYR0.50.
GHLSYS recently made headlines by making a proposal to acquire e-Pay Asia Limited, a company that specialises in electronic payment. Based on its announcement to Bursa, GHLSYS intends to acquire all of the shares in e-Pay Asia Limited, a public company listed on the Australian Securities Exchange.
GHLSYS announced its 2QFY13 results in August. Net profit after tax rose 32% YoY as profit from continuing operations net of tax was MYR1.55m in 2QFY13 compared to MYR1.17m in 2QFY12. The one-off gain recorded in that period 2QFY12 was attributed to the disposal of the group’s China operations. This resulted in an additional profit of MYR0.448m in 2QFY12 which showed a higher EPS. Excluding the one-off disposal gain, the higher profitability is in line with the 22% YoY increase in revenue for 2QFY13.
A check of Bloomberg consensus reveals that only one research house has coverage on GHLSYS, with a BUY call. The stock is currently trading at a historical PER of 18.8x and a P/BV of 2.1x
GHL Systems Berhad (GHLSYS) provides online transaction services with an emphasis on payment and transaction processing. It also deals with electronic draft capture (EDC) equipment.
by Maybank IB