Brokers' take

Silverlake Axis > Buy RHB Research, Sept 7 Sept 7 close: S$0.44 Target price: S$0.57

MANAGEMENT guided for more than half of existing orderbook to be realised in FY2019F, mainly from two revenue streams - licensing and project services. The two revenue streams slumped significantly in FY2017 and FY2018F, but we expect them to surge in FY2019-20.

Due to the rise in licensing revenue with 90 per cent gross margins, we expect overall profitability and margins to increase as well. Banks in South-East Asia were generally cutting capex in the last few years, which resulted in Silverlake Axis' orderbook falling as well.