1HFY22 in-line
Maintain BUY
1HFY22 results were in-line with our estimates at 52% of full-year forecast. 2QFY22 earnings grew by 32% YoY on the back of higher EDC terminal sales and higher TPV, in tandem with the lifting of movement
restrictions. We believe Revenue is positioned to benefit from consumer spending recovery through its omni-channel payment solutions. Maintain BUY with an unchanged TP of RM2.00, based on an unchanged 50x CY23E P/E target (+1.5SD above its 3Y mean).
1HFY22 in-line
2QFY22 net profit of RM4.6m was up 32% YoY on the back of a 46% growth in revenue, mainly contributed by higher EDC terminal sales and higher transaction value processed. 1HFY22 core earnings of MYR8.0m were in-line with our/street estimates, making up 52/54% of full-year forecast. Net cash was flattish at RM89.9m (RM0.19 per share).
Strong uplift from EDC segment
Revenue from the EDC terminals segment arrived at RM14.3m in 2QFY22 (+86% QoQ, +26% YoY) as terminal sales resumed following the reopening of the economy towards the 2H of 2021. This was however partially negated by a slight drop in the rental revenues due to discounts granted to the partner banks. ETP segment revenue grew by 58% YoY on the back of higher TPV during the quarter, driven by wider adoption of ecommerce transactions. Solutions & Services segment also grew by 11% YoY due to higher volume of its cross-border digital payment services.
Multifaceted growth channels
We expect Revenue to benefit from the recovering consumer spending in the physical stores and higher adoption of digital purchases, both of which would drive TPV growth. The absence of movement restriction orders could also drive the resumption of EDC terminal sales as well. Its various digital ventures (WannaPay, VSureTech, and cross-border digital payments with UnionPay) should also further strengthen its ecosystem. The potential issuance of a digital banking license to its consortium (Revenue-Kenanga-Sarawak State), with the winning bids likely to be announced in March 2022, is also another key growth wildcard for Revenue, in our view.