Managepay System Bhd (-ve)
Managepay (MPay) (Fundamental: 1.5/3, Valuation: 0.6/3) offers end-to-end solutions for the electronic payment solutions industry.
In 2012, the company shifted its business strategy from an about-equal mix of the Non-payment services (software security, ICT services and trading of gadgets) and Payment Services (electronic payment solutions) segments to focus on the higher margin Payment Services segment.
This strategy has paid off, with MPay returning to profit in 2012 and net profit for 2013 expanding nearly eightfold to RM941,000, boosted by increased revenue derived from the delivery of credit card terminals for the Teksi 1 Malaysia and ePayment projects. For 2014, MPay’s revenue rose 10.3% y-y to RM9.7 million while net profit grew 50.5% to RM1.4 million.
Notably, the company recently announced its registration as China-based UnionPay International Co Ltd’s third party service provider. MPay would be responsible for switching/gateway services, system operation and product management of Unionpay card issuance in Malaysia, Myanmar, Thailand, Singapore and Indonesia.
The stock is currently trading at 2.54 times book with trailing 12-month P/E of 92.42 times.
This article first appeared in The Edge Financial Daily, on April 23, 2015.