IFCA launching SaaS modules

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(April 17, RM1.65)
Add with a target price of RM1.92:
We recently took IFCA MSC chief executive officer Ken Yong on a roadshow to meet institutional investors in Singapore and Hong Kong. We spent one day marketing in Singapore and another day in Hong Kong. In total, we met 21 fund managers from 18 institutions. There were a few positive surprises from the meetings: (i) In mid-2015, the company is looking to launch three software modules through the service as a software (SaaS), which basically involves renting software and  targeting the smaller property developers. This was a positive surprise as the company had earlier indicated plans to launch only one SaaS software module; (ii) The company is looking to launch its e-commerce portal later this year, which is expected to add value to its current customers.

 We believe the project cost management software will be the most popular among the three SaaS software modules. This software is popular in China as developers there focus on controlling cost due to the slowdown in the property market in the past few years. It could be the same for the Malaysian property market.

In the current market conditions, there is a great need for small property and construction players to automate GST-related finances. Hence, SaaS is ideal for the small players. While SaaS is new in Malaysia, it is popular n the United States. Companies need not be tied down by any software purchased and upfront cost is minimal.

Remain invested in the stock. Over the next few months, news flow should be positive, with SaaS taking off. The beauty of SaaS is its scalability and we have not assumed any earnings from SaaS being launched in Indonesia. — CIMB Research, April 17


This article first appeared in The Edge Financial Daily, on April 20, 2015.