Festive season, reopening of borders boon to GHL’s future performance
KUCHING: GHL Systems Bhd’s (GHL) performance is expected to improve, driven by the upcoming festive season and the reopening of borders as well as the resumption of economic activities, analysts observed.
“We learnt that GHL has also seen improving transaction volume for both its e-Pay and TPA segment in the recent months.
“As the festive season draws nearer, we are positive that this trend will likely continue, thanks to year-end sales as well as strong demand for local travel,” the research team at Kenanga Investment Bank Bhd (Kenanga Research) remarked in a report on GHL’s recently released 3QFY21 results.
It also pointed out that wth Malaysia’s vaccination rate achieving circa 77 per cent of total population, daily Covid19 cases have also fallen to a manageable level of around 5,000 cases (compared with more than 20,000 cases in 3Q21). In addition, the government has recently started to administer booster shots on a voluntary basis.
“This has facilitated the reopening of the economy where local travelling is back and crossing of states allowed,” it highlighted.
On its 3Q results, Kenanga Research noted that its core net profit (CNP) of RM5.5 million brought its first nine months of FY21 (9MFY21) CNP to RM19.5 million, which was generally
below expectation.
The decline was largely due to the FMCO enforcement, the research team explained.
Nevertheless, it pointed out that revenue did not fall off significantly as consumers were still spending while staying at home.
However, CNP fell at a larger quantum as online shopping typically yields lower margin compared to offline payment over the counter.
On a year-on-year (y-o-y) basis, it noted that the comparison further illustrates the impact as 3QFY21 revenue edged seven per cent lower while CNP fell 54 per cent as 2QFY20 experienced
a surge in offline shopping after MCO1.0 ended.
“On a cumulative basis, 9MFY21 revenue was seven per cent higher at RM264.9m while CNP was 10 per cent lower at RM19.5 million owing to different merchant mix,” it said.
All in, Kenanga Research reduced its forecast for FY21E CNP by 17 per cent but maintain FY22E CNP to reflect the slowerthan-expected recovery in FY21 due to the FMCO.
“However, we believe that the reopening of the economy will accelerate consumer spending in FY22, coupled with the possibility of international cross-border travelling,” it said.