KUALA LUMPUR (April 6): GHL Systems Bhd rose 4.72% this morning after the company via its wholly-owned subsidiary S Capital Sdn Bhd said is acquiring payment solutions company Paysys Communications Sdn Bhd for RM80 million, which will give it an opportunity to solidify its presence as a payment solutions provider in Malaysia.

At 9.05am, GHL Systems rose 5 sen to RM1.11 with 17,400 shares done.

It added that the consideration will be satisfied via RM40 million cash and an issuance of up to 33.5 million new GHL shares to be issued at RM1.1927.

Meanwhile, CIMB IB Research upgraded GHL Systems to “Add” at RM1.06 with a higher target price of RM1.60 (from RM1.45).

In a note today, CIMB Research said the Paysys acquisition will expand GHL’s distribution network to 250,000 merchants and help accelerate non-credit card services such as mobile wallets, loyalty cards, etc.

“We raise FY18-20F EPS by 9-11% to account for profit guarantee from Paysys.

“The stock is down nearly 30% year-to-date, partly due to concerns over margin compression.

“However, we expect the Paysys acquisition, mobile wallet infrastructure rollout and higher transaction payment acquisition earnings to drive earnings growth. Upgrade to Add with RM1.60 target price,” it said.