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GHL Systems 3Q15 Earnings Slump 40%
Malaysia Daily Bulletin | 26 November 2015
  • Despite a 14 percent rise in 3Q15 revenue to RM52.1 million on the back of better sales in its transaction payment acquisition (TPA) and shared services divisions, GHL Systems recorded a 40.5 percent decline in net profit to RM1.1 million.
  • The group’s performance in the quarter was weighed down by higher payrolls and expenses to support its TPA expansion, foreign exchange losses and higher effective taxes.
  • For the nine-month period, top and bottom lines registered growth of 33.4 percent and 11.6 percent to RM154.4 million and RM7.2 million respectively.
  • In a separate report, CIMB Equities Research noted that GHL’s 9M15 core earnings was below its forecast due to the higher tax rate and merchant acquisition cost.

Significance: However, the research house has maintained an ‘Add’ rating on the stock, though with a lower target price of RM1.40, and expects better earnings in 4Q15, driven by merchant addition in Malaysia and stronger contribution from the Philippines. It added that stronger TPA earnings and mergers and acquisitions in new markets are potential re-rating catalysts for the stock.

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