Hot Stock IFCA rises 32% on strong earnings expectations

by **Cals** Tue 26 Aug 2014, 09:35

Hot Stock IFCA rises 32% on strong earnings expectations

Business & Markets 2014

Written by Gho Chee Yuan of theedgemalaysia.com

Monday, 25 August 2014 17:07

KUALA LUMPUR (Aug 25): IFCA MSC Bhd rose 8.5 sen or 32% to close at 35 sen today, as investors eyed the software developer's strong income growth prospects.

The third most active stock saw about 139 million shares traded. in active trade early as investors eyed the software developer's income growth prospects.

Maybank Investment Bank forecasts that IFCA may record RM8.8 million in net profit for financial year ended December 31, 2014 (FY14) versus RM1.7million in FY13.

During 1HFY14, IFCA's net profit had risen signifantly to RM3.42 million from RM71,000 a year earlier.

"We also expect the company to post another 50% growth in net profit for FY15," Maybank analyst Wong Wei Sum wrote in a note.

She said the forecast was premised on IFCAQ's strong contract sales, which were expected to grow by 80% in FY14 to RM100 million.

In FY15, contract sales were seen growing 50% to RM150million.

"As at June 2014, balance sheet was clean with a net cash of RM30 million or 6.7sen per share. Pegging it to 14.5 times price to earning ratio (PER) (10% discount to the average of peers of 16.1 times), we derive a fair value of 42sen for IFCA," she added.

The Edge Financial Daily, had quoted IFCA founder and CEO Ken Yong as saying the company expected about 30% of IFCA’s full-year contract sales to spill over to next year.

As at June 30, 2014, IFCA’s contract sales stood at RM63.21 million, which was 14% higher than the whole of last year’s order book of RM55.44 million. In 2012, IFCA’s contract sales was RM47.96 million.