Prestariang’s SKIN project still a necessity — Analysts
KOTA KINABALU: Prestariang Bhd’s (Prestariang) Sistem Kawalan Imigresen Nasional (SKIN) project is not expected to be discontinued even as the new government comes into place as the system is still viewed as a necessity to the country, analysts say.
As the new Pakatan Harapan government assumes the mantle of leadership in Malaysia, several projects are expected to be reviewed or renegotiated. This could include the SKIN project which has just been awarded to Prestariang.
The research arm of AmInvestment Bank Bhd’s (AmInvestment) said that it was unlikely that the project could be terminated as the current immigration infrastructure is in need of a new security system.
Following a meeting with Prestariang’s management, the research team said: “We understand that the current immigration infrastructure is already 27 years old and the border control system might be less robust as a result. This could compromise national security.
“In addition, re-appointing a contractor for the project is a hassle seeing that it took Prestariang four years of onerous process, conducting feasibility studies, preparing proposals and obtaining approvals from various government units.”
Nevertheless, it noted that given a change in government, most public-private partnership (PPP) projects in general may be reviewed.
As such, the research team attached a 30 per cent discount to the fair value of SKIN in its sum-of-parts valuation to reflect possible negative implications arising from a project review, if any.
Overall, AmInvestment retained a ‘buy’ call on the stock.
It said, “We continue to like Prestariang for its leading position in the ICT training and software distribution space in Malaysia, the award of SKIN, which is expected to give a significant boost to the group’s earnings in the coming years, and the recent tie-up with Alibaba Cloud and Conversant Solutions to develop EduCloud, which provides potential new revenue streams.”