KUALA LUMPUR (Nov 27): Shares of IFCA MSC Bhd rose as much as five sen or 4.9% to RM1.07 in the morning trade today, emerging as one of the most active stocks on Bursa Malaysia.

It hit an intraday high of RM1.07 in early trading, but eased to RM1.04 as at 3.11pm, with 26.72 million shares changing hands.

CIMB Research, the only research outfit covering the enterprise software solutions provider, maintained its target price on IFCA at RM1.80, recommending an "add" call as it believes there's still plenty of upside left for the stock.

On Nov 19, IFCA reported a 32.17% drop in its net profit to RM5.79 million for the third quarter ended Sept 30, 2015 (3QFY15) on the back of lower revenue of RM22.61 million. This compared with the previous corresponding quarter's net profit of RM8.53 million and revenue of RM25.75 million.

The company justified the fall by saying it had already expected the market to normalise after having to upgrade their software last year to those that are goods and services tax-compliant.

IFCA also added in the explanatory notes accompanying its 3QFY15 financials that its China operations' revenue grew by 50.9% year-on-year (y-o-y) in the quarter.

Its 9MFY15's net profit meanwhile was 77.09% higher y-o-y at RM21.17 million or 3.8 sen a share. Revenue grew by 35.17% to RM78.47 million in the same period.

In a report dated Nov 20, CIMB Research senior analyst Nigel Foo said IFCA remained an "add", with a target price of RM1.80 being 21 times its projected earnings per share. He added that he had not computed the potential earnings from IFCA's new online property sales venture, property365.my, to be launched next month.

"This will be the country's first real-time transaction property portal where one could book a property unit online using property365.my. IFCA has already secured RM500 million gross development value (GDV) inventory (new launches) from two developers and the company is targeting to grow GDV inventory to more than RM2 billion below the official launch," said Foo.

He noted that if IFCA were to get a 2% commission from RM2 billion worth of GDV, and assuming a net margin of 50% to 60%, its net profit could be boosted by between RM20 million and RM24 million.

This would enhance IFCA's earnings per share by 45% to 55%, Foo added.

(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.)