Posted on 30 April 2014 - 05:40am
PETALING JAYA: Censof Holdings Bhd, an IT solutions provider, would most likely be a key beneficiary for sizeable contracts with the rollout of the Goods and Services Tax (GST) software services nationwide.
Implementation of the GST regime is set to be enforced on April 1, 2015 and registration for GST should open on June 1, 2014.
"This is mandatory for companies with an annual sales turnover of more than RM500,000. As at the end of March 2014, there were 5.4 million companies and businesses registered with the Companies Commission of Malaysia," MIDF Research said.
The Royal Malaysia Customs estimates that 22% or 1.2 million of the total business establishments will fall within the GST system.
"We expect heavy registration as the window to register is only 10 months. In addition, we note that the remaining 4.2 million businesses not subjected to GST may also apply for voluntary registration which would save them the hassle of registering once the business crosses the threshold," MIDF said.
It noted that Censof's recent acquisition of a 45% stake in Time Engineering Bhd was also expected to produce some synergistic benefits.
"Censof will have instant access to Time's client base of more than 30,000 which employs the latter's services of e-commerce, cyber security and integrated intelligent infrastructure," it said.
Censof provides IT solutions for both back-end and front-end products and services such as financial management solutions, e-payment gateway services and investment and asset management solutions to its customers.
Its primary business operations include system design, development geared toward its implementation in installation, maintenance, and support; certified by the ISO 9001:2008 standards, established by a Bureau Veritas Certification.
In addition, Censof is one of the major accounting solutions providers for government agencies, said MIDF, adding that most of the company's contracts are of government origin.
Censof's clientele consists of over 100 key government-related agencies and ministries. Notable clients are Social Security Organisation (Socso), Inland Revene Board (IRB) and the Finance Ministry.
"We value Censof at 58 sen, attaching financial year ending Dec 31, 2015 earnings per share of 3.6 sen against forward price to earnings ratio (PER) of 15.8 times, which is the average four quarter rolling PER over the past two years."
MIDF expects Censof to provide an attractive return on share price of about 14%. The stock closed down 0.5 sen, to 50 sen with some two million shares traded yesterday.