SINGAPORE (Aug 4): SAC Advisors are initiating a “buy” call on Advancer Global Limited (ADGL) with a target price of 36 cents as the group is well into its next phase of growth.
Advancer Global is positioning itself as an integrated workforce service provider by embarking on a series of acquisitions.
In a Thursday report, analyst Terence Chua says: “We think the move increases the 'stickiness' between their customers and the group which is critical for securing contracts with property owners and estate agents as real estates are largely owned by REITS who demand service providers with scale.”
Advancer Global is also well positioned to take advantage of M&A opportunities that come its way as it is currently in a net cash position and has a “large war chest”.
The group is also one of Singapore’s top five maid agencies.
Chua expects this segment of the group’s business to remain a “cash cow” and grow earnings.
However, its facilities management services is expected to contribute earnings after the complete integration of acquisitions which can only happen after the next few years.
“We expect earnings to grow by 15.1% in FY18 and 13.8% in FY19,” says Chua.
Update: Shares in Advancer Global closed 0.5 cent higher at 29 cents on Friday.
