Oct 28, 2013

Weekly Chart - GHLSYS


(Stock Code: 0021)  (Bloomberg Code: GHLS MK Equity)

below: GHLSYS Weekly Chart (click to enlarge)GHLSYS 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.

GHLS fundamental data
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.

GHLS earning summary  
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