KUALA LUMPUR (April 20): Apex Securities has derived a target price of 59 sen for Autocount Dotcom Bhd (ADB), based on 17 times PER of Autocount’s FY2024F EPS of 3.5 sen, which is at a 15% premium to its peers’ forward PER of 15 times.

In a note on Thursday (April 20), the research house said that the premium is warranted mainly due to the larger market share and better brand reputation of ADB compared to its peers.

“Our target price of 59 sen represents a 79% upside against the listing price of 33 sen,” it said.

ADB is involved in the development and distribution of financial management software mainly compromising accounting, points of sales (POS) and payroll systems.

The software is designed to support a wide range of fundamental finance and accounting functions and cater to changing digitalisation needs for businesses and companies.

Apex Securities said ADB is the largest in the local market with strong brand reputation serving the market across multiple industries.

“ADB has the largest market share in the local industry. With its strong brand reputation, the group has sold approximately 70,000 software licenses and is serving 210,000 businesses and companies.

“The customers of ADB spread across multiple industries which include consumer products, F&B, trading, distribution, services, grocery, construction, property development, hospitality, telecommunications and logistics,” it said.

The research house said the group's software-as-a-service (SaaS) offering provides a sustainable income stream, fuelled by strong demand from small and medium enterprises (SMEs),  who make up over 95% of all businesses in the country.

“With a subscription model, the cloud-native software enables the group to collect recurring income from its subscribers.

“The number of subscribers has grown significantly from FY2019 to FY2022, with an impressive 70% renewal rate each year.

“This indicates robust market demand, and the SaaS offering is driving sustainable growth for the group,” it said.