1H18 PATMI Grew by 113%

• ISDN reported a strong set of results for 1H18 with PATMI growing by 113% from S$4.7m in 1H17 to S$10.1m in 1H18. The results far exceeded our expectations of S$12.7m for the full year.
• The positive performance was mainly driven by revenue growth of 17% year-on-year and a 0.9%-point improvement in gross margin. The former added S$4.2m to gross profit while the latter explained for S$1.4m of incremental gross profit. These gains led 1H18 PATMI to expand by S$5.3m year-on-year.
• Foreign exchange gain and other non-recurring gains of approximately S$1m helped to offset against higher operating expenses.

Raising Forecasts to Factor in Strong 1H Results

Due to the strong performance in 1H18, we revised our forecasts to expect full year PATMI of S$17.3m for FY18F. This translates to EPS of 4.4 Singapore cents. Hence, ISDN currently trades at a very conservative forward P/E of 5.1 times.

Downside is further limited by the group’s net cash position of S$17.2m or 4.4 Singapore cents per share.

Source: Tayrona Financial Research - 13 Aug 2018