KUALA LUMPUR (July 11): PublicInvest Research has valued ACE Market-bound Daythree Digital Bhd (Daythree) at 40 sen based on a 20x PE multiple to its FY24F EPS of two sen.
In a note on Tuesday (July 11), the research house said Daythree’s growth will be driven by: i) expansion of its office space (with setup of new CX delivery offices meant for new clients expected to be secured), ii) recruitment of industry experts, iii) setup of a network monitoring centre, and iv) strengthening of branding efforts.
In said Daythree’s competitive strengths include: i) strong focus on human capital development, ii) in-house development of digital tools, iii) diverse client segment base, iv) certified quality management system, and v) experienced management team.
PublicInvest said key drivers may include: i) continuing pursuit of a leaner capital structure by businesses, ii) broad range of end-user markets, iii) drive of digital economy, iv) mature technology infrastructure in Malaysia, and v) steady pool of qualified and quality talents in Malaysia.
Meanwhile, it said key downside risks, among others, include: i) competition, ii) dependency of its top three major clients, iii) high dependency on well trained employees, iv) penalty upon failure to meet contractual service level, and v) potential unauthorised disclosure of confidential data.
Daythree is tentatively slated to be listed on the ACE Market on July 26.