Today, we feature a note on RGB International Berhad in our FundTech Radar– 13th Feb 2018. The company’s, formerly known as Dreamgate Corporation, primary focus is on sales & marketing of electronic gaming machines & equipment (3rd party electronic gaming machines & equipment); as well as technical support management and machine concession programmes (based on profit-sharing basis). Total sales were made up of 97% export market vs. 3% local market.
· 3-year (FYE14-16) sales and PATAMI CAGR of 22% and 36% respectively
· Its FY16 PATAMI margin was up slightly to 10.5% (vs. 10.3% in FY15)
· net cash position of RM103.1m (8 sen per share)
· consistent div. payment since FY13. FY16 div. yield was 2.3%
· FY16 div. payout rose slightly to 32.4%
· The third major shareholder is a reputable value investor Fong Siling, better known as “*Cold Eye*” in investing circles
· Datuk Chuah, the single largest shareholder, expected net profit to grow by double digits in % terms for the FY17 over that of FY16. Moreover, RGB is also expecting an additional RM50m in turnover this year
· currently trading at 12.5x 12-month trailing P/E (8.8x if excludes 8 sen net cash per share), which is a 10.4% premium to its 3-year historical average P/E of 11.3x
Still consolidating in a triangle formation
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This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
13th Feb 2018
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