Orion IXL Berhad provides computerized maintenance management systems
(CMMS) in Malaysia and the United States. It also offers various other
information technology services, such as systems integration, support
services, and training. The company was formerly known as CWorks Systems
Berhad and changed its name to Orion IXL Berhad in March 2016. Orion
IXL Berhad is based in Petaling Jaya, Malaysia.
Orion aims to be a global provider of the CMMS by focusing on several key areas, namely product development, research and development (“R&D”) activities, marketing and human resource development. The CMMS is a preventive maintenance software which is designed to meet an entity’s needs of maintenance operations with functionalities such as asset management, work management, preventive maintenance management and material management. Orion’s solution has generally been applied to building management such as lighting and wiring checking, or outdoor components such as tension cable maintenance.
The main features of the CMMS solution comprises:
How could this company be a hidden gem with this kind of results? This statement was correct as of 1st half of 2017. Here is the story:
On 17th Oct 2016, Orion made a M&A proposal for the acquisition of the entire equity interest in ASAP Berhad (“ASAP”), which also in CMMS business, for a total purchase consideration of RM73 million. In conjunction with the Proposed Acquisition, the Company proposes to undertake the following corporate proposals:
It was later amended the acquisition will be fully by cash consideration of RM 73 million instead of cash and Orion shares
ASAP Company background:
The business scale of ASAP is a much bigger compare to Orion (its FY2016 PAT was RM 5.85 million).
Something interesting happened during the M&A. The right issue was underscribed, the retailers, who did not want to participate in the right issue, were selling their shares in the open market and caused a slump of the share price from RM 0.42 to RM 0.14 within 3 months.
Orion had to get 100% subscription of the right issue in order to complete the M&A, as a result, 2 major shareholders of ASAP subscribed for the rest of the right issue and holding 35% of Orion's share after the M&A. Technically, Orion was inverted-acquisite by the shareholders of ASAP.
Here is the best part. The M&A came with a special T&C: PROFIT GUARANTEE
The acquisition was completed in July 2017, with the guarantee PAT of RM7.5 mil a year, which equivelent to RM 625k per month, the profit of ASAP in August and September were counted in Orion's Q3FY2017 QR = RM 1.25 million. Let's look back at Orion Q3FY2017 QR.
BINGO! The NP was very closed to the estimated number. With this in mind, it is very easy for us to estimate next quarter result:
RM 625k x 3 months = RM 1.875 million of guarantee PAT. Which equivalent to 0.31 cents EPS each for the next 8 quarters!. If we were to calculate the FY EPS for Orion (consider Orion is a loss making company without ASAP contribution, possible earning could between RM1.5 - 1.8 million)
FY2017 Orion could be still suffering loss, but FY2018 will be a different story. How much does its share worth? Orion is under ACE technology market, by using PE 15-19, its value should be around:
As of today (5th Dec 2017), its share price was at RM 0.115 - RM 0.120, with 60% to 100% space to grow in one year. Not to mention the long expiry date (2022) Orion-WA was at RM 0.045 (exercise price RM 0.17) with high gearing ratio.
Is Orion a hidden gem? Coming QRs will tell.
By the way, in case you curious. Orion is a net cash company with RM 5.5mil cash and total debt of RM 126k
*Disclaimer: The information above is only for sharing purpose, it does not contain buy or sell call. Trade at your own risk.
Orion aims to be a global provider of the CMMS by focusing on several key areas, namely product development, research and development (“R&D”) activities, marketing and human resource development. The CMMS is a preventive maintenance software which is designed to meet an entity’s needs of maintenance operations with functionalities such as asset management, work management, preventive maintenance management and material management. Orion’s solution has generally been applied to building management such as lighting and wiring checking, or outdoor components such as tension cable maintenance.
The main features of the CMMS solution comprises:
- Scheduling preventive maintenance, either metered based scheduling, or time based scheduling – Users are sent reminders to maintain their assets either after certain amount of time or after certain measurements in a meter
- Generate preventive maintenance work orders – Users are automatically asked to send work orders for maintenance of their asset
- Materials module to ensure adequate maintenance spare parts, suggest and originating the purchase of required repair parts – Users are automatically asked to replace parts or modules for maintenance
- Checklist attachment – Creates a task checklist library and attach them to any preventive maintenance schedule
- Tracking costs of maintaining individual equipment – Monitors the extent of maintenance costs spent and to be spent on equipment
- Maintaining asset registry and repair database and asset warranty tracking – A database is produced to keep maintenance, repairs and warranty records for all assets
How could this company be a hidden gem with this kind of results? This statement was correct as of 1st half of 2017. Here is the story:
On 17th Oct 2016, Orion made a M&A proposal for the acquisition of the entire equity interest in ASAP Berhad (“ASAP”), which also in CMMS business, for a total purchase consideration of RM73 million. In conjunction with the Proposed Acquisition, the Company proposes to undertake the following corporate proposals:
It was later amended the acquisition will be fully by cash consideration of RM 73 million instead of cash and Orion shares
ASAP Company background:
The business scale of ASAP is a much bigger compare to Orion (its FY2016 PAT was RM 5.85 million).
Something interesting happened during the M&A. The right issue was underscribed, the retailers, who did not want to participate in the right issue, were selling their shares in the open market and caused a slump of the share price from RM 0.42 to RM 0.14 within 3 months.
Orion had to get 100% subscription of the right issue in order to complete the M&A, as a result, 2 major shareholders of ASAP subscribed for the rest of the right issue and holding 35% of Orion's share after the M&A. Technically, Orion was inverted-acquisite by the shareholders of ASAP.
Here is the best part. The M&A came with a special T&C: PROFIT GUARANTEE
The acquisition was completed in July 2017, with the guarantee PAT of RM7.5 mil a year, which equivelent to RM 625k per month, the profit of ASAP in August and September were counted in Orion's Q3FY2017 QR = RM 1.25 million. Let's look back at Orion Q3FY2017 QR.
BINGO! The NP was very closed to the estimated number. With this in mind, it is very easy for us to estimate next quarter result:
RM 625k x 3 months = RM 1.875 million of guarantee PAT. Which equivalent to 0.31 cents EPS each for the next 8 quarters!. If we were to calculate the FY EPS for Orion (consider Orion is a loss making company without ASAP contribution, possible earning could between RM1.5 - 1.8 million)
FY2017 Orion could be still suffering loss, but FY2018 will be a different story. How much does its share worth? Orion is under ACE technology market, by using PE 15-19, its value should be around:
As of today (5th Dec 2017), its share price was at RM 0.115 - RM 0.120, with 60% to 100% space to grow in one year. Not to mention the long expiry date (2022) Orion-WA was at RM 0.045 (exercise price RM 0.17) with high gearing ratio.
Is Orion a hidden gem? Coming QRs will tell.
By the way, in case you curious. Orion is a net cash company with RM 5.5mil cash and total debt of RM 126k
*Disclaimer: The information above is only for sharing purpose, it does not contain buy or sell call. Trade at your own risk.
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