Caveat Emptor

Battle of the titans in the Trade war September is a month of hazy outlook. There is temporary ceasefire of the trade war, and the yearly forest fires from Indonesia added some ambience to the hazy atmosphere. After China and US rediscovered the economic damage they have inflicted to their economy, the Fed and the Chinese monetary authority launched another round of stimulus (interest rate cuts) to repair the damage dealt. As the fearful mood shifted from trade war escalations to negative interest rates destroying the economy, I am staying my course in ignoring prophets of doom and quietly entered another position into Silverlake Axis. SLA evolved from a small entry position in my portfolio to one of the largest position throughout the years and I will be seeking peer analysis / feedback on the validity of the thesis. After discussion of AIT with my community of investors, they are of the opinion that India might be experiencing economic slowdowns and tail risks at the end ...

Thesis : Largely unchanged since my assessment last year. Cyclical company that is on the uptrend due to increase in order book(RM340m order backlog). There is general increase in IT Capex of financial institutions. There are core banking contracts (high margin)as well as several (lesser margin) Thai / Malaysian contracts that was won. The financial effects are delayed to be booked in the FY 2018 Annual reports and financial records and the market have not sufficiently priced in the fundamentals. There is understatement of the company's financial performance as most of its books value are booked in the next quarter / financial year . Project related order book value has doubled and this certainly leads to large increase in Accounts receivable and increased cash flow in the future. The macro trend of Fintech in Asia is exceptional favorable, with Singapore Ravi menon stressing on the importance of embracing Fintech and setting up Fintech hub, UOB and OCBC digitalizing banking op...