|CGS-CIMB's report on 9 July 2021 rated Silverlake Axis a 'buy' with a target price of 35 cents. The stock, a former market darling which is currently trading near 8-year lows, has prompted a favourable KGI report too (below).|
|SILVERLAKE AXIS (SILV SP): The future is digital|
- BUY Entry – 0.26 Target – 0.30 Stop Loss – 0.24
Silverlake Axis is a software company that provides banking solutions to banks in Asia. The company has been operating for more than 30 years. Of the top 20 largest banks in Southeast Asia, 40% of them use Silverlake’s core banking solutions.
- Parent’s new partner. Earlier this month, The Edge reported that private equity firm Ikhlas Capital is investing US$40mn in Silverlake Group, the holding company of the SGX-listed Silverlake Axis Ltd. Silverlake Group is the largest shareholder of Silverlake Axis.
In turn, Ikhlas Capital is partly owned by former banker Datuk Seri Nazir Razak, and the firm is one of the partners of a conglomerate comprising other firms including AirAsia’s Group e-wallet unit Big Pay and Malaysian Industrial Development Finance (MIDF) vying for one of the five digital banking licenses to be awarded by the first quarter of 2022.
- New opportunities. Given Silverlake Axis’s experience and expertise in providing banking solutions over the past 30 years, combined with the recent news of investment by Ikhlas Capital into its parent company, we think that the award of one of the five digital banking licenses could provide a much-need catalyst to Silverlake’s share price.
Silverlake’s share price is currently trading near its 8-year low, partly due to business slowdown over the years, and also due to a damaging short-seller report in 2015 which caused its market cap to almost halve in value.