Silverlake Axis - Phillip Securities 2024-05-16: Higher OPEX Hurt Earnings

• Silverlake Axis (SGX:5CP)'s 3QFY24 earnings of RM23.3mil were below our estimates. 9MFY24 earnings were at 62% of our FY24e. The 33% y-o-y dip in earnings came from Higher cost of sales (+53% y-o-y) and operating expenses (+9% y-o-y) despite an increase in total revenue.
• - Read this at SGinvestors.io -
• Order backlog of RM180mil going into the rest of FY24 with the total deals pipeline at RM1.2bn.
• We lower FY24e earnings forecast for Silverlake Axis by 19% as we lower gross profit margin estimates and increase OPEX estimates for FY24e. Downgrade to ACCUMULATE with a lower Silverlake Axis target price of S$0.33 (previously S$0.36).

The Positives

Recurring revenue rose 10% y-o-y.

• - Read this at SGinvestors.io -
• Silverlake Axis (SGX:5CP)'s 3QFY24 earnings of RM23.3mil were below our estimates. 9MFY24 earnings were at 62% of our FY24e. The 33% y-o-y dip in earnings came from Higher cost of sales (+53% y-o-y) and operating expenses (+9% y-o-y) despite an increase in total revenue.
• 3QFY24 recurring revenue comprising maintenance and enhancement services, insurance ecosystem transactions and services, and retail transactions processing revenue grew 10% y-o-y, while non-recurring revenue comprising software licensing, software project services and sale of system software and hardware products rose 42% y-o-y.
• Order backlog of RM180mil going into the rest of FY24 with the total deals pipeline at RM1.2bn.
• We lower FY24e earnings forecast for Silverlake Axis by 19% as we lower gross profit margin estimates and increase OPEX estimates for FY24e. Downgrade to ACCUMULATE with a lower Silverlake Axis target price of S$0.33 (previously S$0.36).

The Positives

Recurring revenue rose 10% y-o-y.

• Silverlake Axis's recurring revenue comprises maintenance and enhancement services, insurance ecosystem transactions and services, and retail transactions processing revenue.
  • Read more at SGinvestors.io.
  
  
  
  

  
  Above is the excerpt from report by Phillip Securities Research.
  Clients of Phillip Capital may be the first to access the full report in PDF @ https://www.stocksbnb.com/.
  
  

  
  
  Glenn Thum Phillip Securities Research | https://www.stocksbnb.com/ 2024-05-16 SGinvestors.io
  
  

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  Read also Phillip's most recent report:
  2024-08-29 Silverlake Axis - Accept Cash Offer Of S$0.36.

  Price targets by other brokers at Silverlake Axis Target Prices.

  Listing of research reports at Silverlake Axis Analyst Reports.

  Relevant links:
  Silverlake Axis Share Price History,
  Silverlake Axis Announcements,
  Silverlake Axis Dividends & Corporate Actions,
  Silverlake Axis News Articles