Silverlake

Silverlake: Maybank-KE initiates with Buy and $1.40 TP. The house expects a solid 16% earnings CAGR over the next three years to sustain its re-rating, while the group’s highly cash generative business should support rising dividends. Ranked fifth in Asia Pacific and top 2 in Southeast Asia, Maybank-KS expects Silverlake to benefit from growing IT spending by banks, and an ongoing drive to upgrade ageing core banking systems, which will continue to drive sales and allow it to monetize the large installed base of its products. With an ungeared balance sheet and sizeable war chest of more than Rm300m in cash, Silverlake could optimize their capital structure by announcing a special dividend or initiating a share buyback program. Silverlake currently trades at 22.1x forward P/E and 4.3% forward yield versus closest peer Temenos’s 24.8x and 1.2% respectively.