KASE:SYS

Stock Analysis Report

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Executive Summary

Systems Limited engages in the software development, trading of software, and business process outsourcing (BPO) activities in North America, the Middle East, and Pakistan.


Snowflake Analysis

Solid track record with excellent balance sheet.


Similar Companies

Share Price & News

How has Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SYS's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.2%

SYS

2.2%

PK IT

0.7%

PK Market


1 Year Return

75.9%

SYS

8.4%

PK IT

-10.3%

PK Market

Return vs Industry: SYS exceeded the PK IT industry which returned 8.4% over the past year.

Return vs Market: SYS exceeded the PK Market which returned -10.3% over the past year.


Shareholder returns

SYSIndustryMarket
7 Day4.2%2.2%0.7%
30 Day10.2%8.8%1.8%
90 Day10.0%2.1%-9.6%
1 Year78.5%75.9%10.7%8.4%-6.1%-10.3%
3 Year125.5%114.3%41.1%34.6%-29.6%-38.5%
5 Year333.5%293.9%11.1%4.3%1.6%-20.5%

Price Volatility Vs. Market

How volatile is Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Systems undervalued compared to its fair value and its price relative to the market?

11.32x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SYS (PKR165.63) is trading above our estimate of fair value (PKR17.56)

Significantly Below Fair Value: SYS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SYS is good value based on its PE Ratio (11.3x) compared to the IT industry average (20.2x).

PE vs Market: SYS is poor value based on its PE Ratio (11.3x) compared to the PK market (8.2x).


Price to Earnings Growth Ratio

PEG Ratio: SYS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SYS is overvalued based on its PB Ratio (3.3x) compared to the XA IT industry average (2x).


Next Steps

Future Growth

How is Systems forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-3.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SYS's earnings are forecast to decline over the next 3 years (-3.1% per year).

Earnings vs Market: SYS's earnings are forecast to decline over the next 3 years (-3.1% per year).

High Growth Earnings: SYS's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SYS's revenue (7.3% per year) is forecast to grow faster than the PK market (5.7% per year).

High Growth Revenue: SYS's revenue (7.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SYS's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Systems performed over the past 5 years?

32.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SYS has a high level of non-cash earnings.

Growing Profit Margin: SYS's current net profit margins (22.1%) are higher than last year (19.8%).


Past Earnings Growth Analysis

Earnings Trend: SYS's earnings have grown significantly by 32% per year over the past 5 years.

Accelerating Growth: SYS's earnings growth over the past year (57%) exceeds its 5-year average (32% per year).

Earnings vs Industry: SYS earnings growth over the past year (57%) exceeded the IT industry 11.1%.


Return on Equity

High ROE: SYS's Return on Equity (29.1%) is considered high.


Next Steps

Financial Health

How is Systems's financial position?


Financial Position Analysis

Short Term Liabilities: SYS's short term assets (PKR6.1B) exceed its short term liabilities (PKR1.6B).

Long Term Liabilities: SYS's short term assets (PKR6.1B) exceed its long term liabilities (PKR186.4M).


Debt to Equity History and Analysis

Debt Level: SYS's debt to equity ratio (10.9%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if SYS's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: SYS's debt is well covered by operating cash flow (129.3%).

Interest Coverage: SYS's interest payments on its debt are well covered by EBIT (62x coverage).


Balance Sheet


Next Steps

Dividend

What is Systems's current dividend yield, its reliability and sustainability?

1.36%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SYS's dividend (1.36%) isn’t notable compared to the bottom 25% of dividend payers in the PK market (2.27%).

High Dividend: SYS's dividend (1.36%) is low compared to the top 25% of dividend payers in the PK market (8.91%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, SYS has been paying a dividend for less than 10 years.

Growing Dividend: SYS's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (15.4%), SYS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.9yrs

Average management tenure


CEO

Muhammad Peer

7.42yrs

Tenure

Mr. Muhammad Asif Peer has been the Chief Executive Officer and Managing Director of Systems Limited since January 1, 2013. Mr. Peer served as Senior Vice President of Services at Visionet Systems Inc. and ...


Leadership Team

NamePositionTenureCompensationOwnership
Aezaz Hussain
Founder & Non Executive Chairmanno datano data13.18% PKR2.7b
Muhammad Peer
CEO, MD & Executive Director7.42yrsno data5.82% PKR1.2b
Roohi Khan
Chief Financial Officer2.33yrsno datano data
Toima Asghar
Chief Human Resource Officerno datano datano data
Salman Wajid Mian
Chief Process Outsourcing Officer4.92yrsno datano data
Saad Aslam
Company Secretary1.67yrsno datano data

4.9yrs

Average Tenure

Experienced Management: SYS's management team is considered experienced (4.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Systems Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Systems Limited
  • Ticker: SYS
  • Exchange: KASE
  • Founded: 1977
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: PK₨20.459b
  • Shares outstanding: 123.52m
  • Website: https://www.systemsltd.com

Number of Employees


Location

  • Systems Limited
  • Ex-Air Avenue
  • E-1, Sehjpal
  • Lahore
  • Pakistan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SYSKASE (Pakistan Stock Exchange Limited)YesOrdinary SharesPKPKRFeb 2015

Biography

Systems Limited engages in the software development, trading of software, and business process outsourcing (BPO) activities in North America, the Middle East, and Pakistan. The company offers solutions in the areas of digital commerce, business applications, data management and analytics, business process outsourcing, cloud services, application development and integration, security, and IT infrastructure. Its products include Partner Communication, which transmits data between large enterprises with either VAN-based or direct-to-partner connections; and Middleware Connector unifies existing eCommerce solution with Dynamics 365 that eliminates error-prone and time-consuming manual integration between platforms and creates a single synchronized system for centralized channel management. The company also provides Retail Analytics, a BI platform for the retail industry that offers various built-in metrics and KPIs, reports, and dashboards; HauteLogic, a suite of modular tools for intelligent fashion supply chain and direct-to-consumer operations; SysHCM, a human capital management solution; and TrIPS, a cloud-based insurance solution. It serves retail, consumer goods, financial services, and telecommunication industries, as well as the public sector. Systems Limited was founded in 1977 and is headquartered in Lahore, Pakistan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/06 18:26
End of Day Share Price2020/06/05 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.