Hot Stock Datasonic rises 8.4%, driven by MyKad & passport contracts

by **Cals** Fri 18 Apr 2014, 02:26

Hot Stock Datasonic rises 8.4%, driven by MyKad & passport contracts

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Thursday, 17 April 2014 12:02

KUALA LUMPUR (Apr 17): Datasonic Group Bhd rose as much as 8.4% as the firm’s earnings are seen to be driven by its MyKad and passport contracts.

At 11.46 am today, Datasonic gained 24 sen or 8.4% to RM3.09. The third top gainer saw some 5.0 million shares change hands.

In a note, RHB Investment Bank Bhd said it had upgraded the ICT solutions provider's stock to ‘buy’ from ‘neutral’.

But the research house said it maintained its fair value of RM4.08 and earnings forecasts for the company.

Analyst Kong Heng Siong of RHB IB said: “Our FY14F and FY15F earnings estimates are still premised on our assumption that the group would secure a new order of 10 million cards worth RM180 million to RM190 million.”

“With its fundamentals remaining largely intact, we foresee earnings growth to be driven by its MyKad and passport contracts.”

Kong said he expects Datasonic’s earnings growth to be driven by the full-year contribution from its provision of photopages for the new Malaysian passports.

He noted the group had an outstanding order book of 4 million copies of MyKad as of December 2013.

He said the successful rollout of the new MyKad saw improved security features to help combat identity fraud-related crimes.

Meanwhile, Kenanga Research said Datasonic would see immediate technical support and resistance levels at RM2.63 and RM3.02 respectively.