Since the release of its 3Q14 results, share price has rallied over 30% from S$0.875 as of 7th May 14, and had reached a new high of S$1.22. Recent media reports highlighted that CIMB Group, Malaysia‘s 2nd largest bank, is seeking to acquire RHB Capital Bhd, 4th largest bank in Malaysia, and Malaysia Building Society Bhd (MBSB). Should the merger go through, it would almost certainly lead to RHB’s core banking system to be integrated with CIMB’s 1Platform, a regional core banking platform which uses Silverlake Axis Integrated Banking Solution (SIBS). Silverlake Axis would also likely benefit from the possible acquisition on Wing Hang bank by OCBC, through demand for post-merger integration projects as OCBC also uses SIBS for its core banking system.
In this report, we also summarised some of the insights shared by management of Silverlake Axis on the group’s future prospects and value proposition to fund managers when we hosted them during our PhillipCapital Corporate Day held earlier on 2nd July 2014.
Target Price: S$1.320
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