Recommend based on technicals with low MACD, retained levels of OBV and probable breakout triangle moving on an uptrend. Obviously we follow our rule by only trading counters which are fundamentally sound.
Investment Thesis
We take a look at the company providing one of our trading platform TC Pro. We were surprised by the margins registered (Net Margin: High 20s) in this business and got interested on the basic fundamental numbers and business overview.
Furthermore, we see that the company has good financials to back it up and doesn’t seem to have any issue that could affect their cash flow. In short, we are very positive on the fundamental values.
Business Overview
We found that growth started to come especially with old style trading platforms becoming slow and a big hassle for major banks. Migrating to newer platform giving up online trading platforms that are slow potentially solve the bank’s problem.
IT teams of I-banks are being outsourced to a company with that that particular expertise and the move seems to benefit all parties. From ease of security to continous maintenance and minimizing down time, it is really the best option for all parties not forgetting the customer.
In general we see a good trend of adoption towards a third party trading platforms as the firms who make these software increases their credibility in the eyes of those investment banks giving them the contract.
Infrastructure is already up and growth trends still remain clear. We should be able to see recurring income to increase over the next few years.
Not only the company’s exposure boils down to Malaysia, apparently they provide services like these in other countries. We think it is hard to fight among other providers in Hong Kong or Singapore, but the integration provided such as multi country trading still play a major role.
O'Mighty Capital 