KUALA LUMPUR (Jan 28): Electronic payment solutions provider GHL System Bhd’s share price climbs today, after it signed a Transaction Payment Acquisition (TPA) arrangement with Global Payments Malaysia.

At 3.30pm, the stock gained 9.15% or seven sen to 83.5 sen, with 19 million shares changing hands. It is one of the actively-traded counters today.

GHL Systems (fundamental: 1.40; valuation: 0.30) said in an announcement with Bursa Malaysia yesterday, that its wholly-owned subsidiaries GHL Cardpay Sdn Bhd and GHL Epayments Sdn Bhd have each entered into an agreement with Global Payments Malaysia. GHL’s subsidiaries would act as payment facilitator (PF) and payment service provider (PSP) for Global Payments Malaysia.

They have an initial target to acquire 3,000 to 4,000 merchants this year.

Meanwhile, in a note today, CIMB Research said the announcement did not come as a complete surprise; it was nevertheless a relief that GHL has finally secured the agreement, after recent delays.

“We understand that given GPM’s partnership with HSBC Bank Malaysia, the bank will act as a local clearinghouse for the payment transaction, as required by Bank Negara.

“Thus, GHL can officially begin its merchant acquisition process, and start generating revenue from merchant discount rates and terminal rental from the smaller third- and fourth-tier merchants,” it said.

CIMB Research has projected 10,000 merchants will sign up for its TPA service in 2015, mainly driven from Malaysia and the Philippines which is expected to reach over 9,000 merchants, while there will be minimal growth from Thailand.

The research house has an “add” rating on GHL shares, as it thinks the company’s growth prospect is intact and CIMB Reserach is confident of execution strategy.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)