Silverlake Axis

Silverlake Axis: CIMB INITIATES COVERAGE with OutPerform Call and $0.59 TP. House note that Silverlake Axis is currently the leading core banking software provider and systems integrator for top financial institutions in the ASEAN region. Its dominant position and solid business model makes the company a highly investable stock for the long term. TP is derived using DCF, with cost of equity of 8.5%, from FY13-22, and a terminal growth rate of 0% (no growth after FY22). This translates into an implied CY14 P/E of 16.1x, around its average P/E from FY08-12 and in line with the average of its closest peers. Rerating catalysts include contract wins and strong quarterly results.