CGS-CIMB is maintaining its ‘add’ call on Silverlake Axis despite seeing its 1QFY2021 results fall short of expectations. CGS-CIMB analyst Ong Khang Chuen has tweaked the target price of the financial services software provider down 1 cent to 38 Singapore cents. 

“1QFY6/2021 core net profit of RM33 million ($10.81 million) (+48% q-o-q, -30% y-o-y) was below expectations, coming in at 17% of our FY2021F forecasts. The key surprise was weaker-than-expected topline (-5.5% q-o-q, -9.8% y-o-y), which management attributed to temporary disruptions arising from a cybersecurity incident in September,” says Ong in a Nov 13 note. 

Margins were pressured due to unfavourable revenue mix resulting in lower GPM and higher effective tax rate due to loss of pioneer status by a Malaysian subsidiary.

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