KUALA LUMPUR: AmInvestment Research has reiterated its Buy recommendation on Prestariang Bhd with unchanged forecasts and fair value of RM2.08 a share.
It noted that the company has received a RM222.6mil contract from the Ministry of Finance for the supply of Microsoft software licences, products and services to all government agencies and public training centres in Malaysia.
"We are keeping our forecasts as the development has already been accounted for. Nonetheless, we are positive on the announcement as the group continues to prove
execution capabilities in its core businesses," it said.
AmInvestment Research projects a 25% growth in Prestariang's software management revenue for FY18F.
It noted that Prestariang also intends to move up the value chain by offering more value-added services such as cloud computing and other analytics to comement its licensing distribution business.
It is positive on Prestariang's leading position in the ICT training and software distribution space, the award of SKIN, which is expected to increase net profit b more than 8x from FY16 to FY18F, and the recent tie-up with Alibaba Cloud and Conversant Solutions to develop EduCloud.
"At the current price, Prestariang appears undervalued for a solutions provider. The company currently trades at a 1- year forward PE of 12x, while its regional comparables,
Chinasoft International and Hexaware Technologies, are both trading at 19x."
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