IFCA up as much as 5.7% as GST kicks in

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KUALA LUMPUR (Apr 1): Goods and services tax (GST)-compliant software provider IFCA MSC Bhd has risen as much as 7 sen or 5.65% to RM1.31 as the new consumption tax commences today.

At 4.08pm, IFCA (fundamental: 3.0; valuation: 1.5) pared gains to RM1.30, 6 sen or 4.84% higher than the previous day’s closing after some 16.2 million shares changed hands. It is one of the most actively traded counters on Bursa Malaysia today.

For comparison, the FBM KLCI is down 3.26 points or 0.18% at 1827.52 point.

IFCA’s counter was trading at 77 sen on Jan 2, 2015, which means it has gone up about 70.13% since.

Rival GST-compliant software provider Censof Holdings Bhd (fundamental: 1.95, valuation: 1.8) has also gone up; it went up as much as 1 sen or 2.3% to 44.5 sen.

At 4.14pm, it was traded at 44 sen, up 0.5 sen or 1.15%, with 3.86 million shares traded.

In a note dated Mar 6, CIMB Investment Bank said it was maintaining its "add" rating on IFCA shares with a target price of RM1.48.

CIMB said 2015 should be another “record year” for IFCA, with growth coming from the China market and GST software upgrade jobs.

It noted that IFCA was looking to launch its software as a service (SaaS), which allows smaller property companies to "rent" IFCA’s software, which is expected to help grow the company’s recurring income.

“SaaS could boost the company’s recurring income so that the company will be less dependent on revenue from just selling software,” it 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.)