KUALA LUMPUR: Iris Corp Bhd has been going through a tough phase and its share price for the last 12 months has reflected that but minority shareholders and analysts are optimistic that the company is in the midst of turning around.
In the last one year, Iris had a negative return on share price of 8.3 per cent.
“We are value investors. We only invest for the long term and we believe the company will turn around very soon. Its core business is attractive and that is where the real value is for the company,” some of the minority shareholders told NST Business after Iris’ annual general meeting here yesterday.
“The company has presented to us its restructuring plan to turn itself back to profitability and as long as the company keeps strengthening its core business, we will not exit,” they added.
The shareholders have given a clue that the company is looking to strengthen its core business by expanding overseas to increase its customer base.
The Iris management, however, was not available to answer any media queries.
Looking at Iris’ fundamentals, its debt ratio has been stable over the last five years in line with its declining revenue.
Iris’ revenue in the past has been mainly driven by its digital identity solutions segment but dragged by its non-core businesses. In the last quarter ended June 2017, the segment contributed 98 per cent to the company’s revenue.
As a result, the company returned to the black in the quarter with RM5.2 million net profit compared with a net loss of RM3.9 million in the same period in the preceding year.
According to Bloomberg consensus estimate, Iris could return to the black for the whole financial year 2018 with a net profit of RM13.7 million, which would grow to a net profit of RM16.5 million in the full-year ending March 2019.
TA Securities, on the other hand, had a “buy” rating on Iris with a target price of 25 sen above its last 12-month high of 21 sen. It believes the current share price offers a “buy at low” opportunity for investors with strong upside potential of 47.1 per cent.
In July, Destini Bhd group managing director Datuk Rozabil Rozamujib Abdul Rahman and Caprice Capital International Ltd chief executive Datuk Paul Poh Yang Hong joined the company.
They would reportedly act as a joint-anchor with Felda Investment Corp Sdn Bhd (FIC) to drive Iris’ future growth by refocusing on its core identification solutions business and strengthening its operations in that segment. FIC is a substantial shareholder of Iris with 19.39 per cent stake.