UNSW Securities Research
Australian School of Business
School of Banking and Finance
GROUP ASSIGNMENT COVER SHEET
Student number: z3379752
Student number: z3376495
Student number: z3414572
Student number: z3373929
Student number: z3422312
Name: Nathan Giang
Name: I-Hsin Huang
Name: Jack Huang
Name: Lee Kadish
Name: Jerome Peng Hoe Law
Course Name: FINS3641 - Security Analysis and Valuation
Lecturer: Henry Yip
Tutor: Annie Chen
Classroom: QUAD G032
Essay/Assignment Topic: Firm valuation
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Mark/Grade: _______________________________________________________________________________ Comments:___________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ _________________________________________________________________________________________ www.asb.unsw.edu.au Last updated: 17/08/12 CRICOS Code: 00098G
UNSW Securities Research
14 April 2014
From technology to dividend
We place a BUY recommendation with a target price of $14.27: This derives from our insights into the company as well as detailed financial and valuation analysis.
Opportunities in developing markets: Growth is strong in
developing markets, providing a sustainable revenue source for future years.
Acquisitions maintaining market dominance and market share:
Acquisitions are the main driver of revenue growth, and allows CPU to increase economies of scale and maintain market dominance.
R&T deal ($US 37.3m): Integrates their 860 issuer clients, and obtains their annual revenues of $US19million. Expected to achieve synergies consistent with previous transactions.
Anticipated synergies expected to be realised: As of 31
December, CPU has realised 51% of expected FY14 synergies.
Limited downside, immense upside potential: 70% of revenue
was consistent in nature. Relatively stable revenue during economic troughs and robust revenue growth during economic peaks.
Long-term cost savings trajectory: Still to realise full end benefits of outsourcing and offshoring over next three to four years post acquisition of Shareowner Services who have 10 years of expertise in the field.
Share Registry Services
Jerome Peng Hoe Law
52wk Range (A$)
Market Cap (A$m)
Shares O/S (m)
Price (14 May 2014 $A)
CPU vs. ASX 200
9.54 - 12.97
References: Bloomberg, 2014, ‘CPU:ASU Stock Quote’, Bloomberg, Australia, viewed 1 May 2014,
Cole, B., 2014, ‘Computershare looking for more deals’, Business Spectator, 1 May 2014, viewed 3 May 2014,
Computershare, 2013, ‘ Annual Report 2013, Computershare, Australia, Viewed 1 May 2014,
Computershare, 2012, ‘Annual Report 2012’, Computershare, Australia, Viewed 1 May 2014,
Google Finance, 2014, ‘Company stock information CPU.AX’, Google, Australia, viewed 1 May 2014,
J.P.Morgan, 2014, ‘Australian Registry Share Service Provider Survey 2014’, J.P.Morgan, viewed 4 May 2014,
KPMG, 2013, ‘corporate finance: Valuation Practices Survey 2013’, KPMG, Australia, viewed 3 May 2014,
Morningstar, 2014, ‘CPU: Company report/Corporate details’ Morningstar, viewed 1 May 2014,
Morningstar, 2014, ‘CPU’s global business requires minimal capital, is very profitable and generates a strong cash
flow’, Morningstar, Australia, 12 February 2014, Viewed on 5 May 2014,
RBA, 2014, ‘RBA: Statistical Tables’, RBA, Australia, Viewed 3 May 2014,
SMH, 2014, ‘Computershare acquisitions on track’, SMH, viewed on 5 May 2014,
The Motley Fool, 2012, ‘Computershare feel’s investors’ pain’, The Motley Fool, Australia, viewed on 4 May 2014
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