FINS3641 CPU Report 2014 Final 3

Topics: Revenue, Economic growth, Stock market Pages: 23 (9562 words) Published: April 27, 2015
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
Tutorial/Seminar/Lab
Day: Thursday
Time: 2-3pm

Classroom: QUAD G032

Essay/Assignment Topic: Firm valuation
Date Due: ______________________________ Date Submitted: _____________________________________

I declare that this assessment item is my own work, except where acknowledged, and has not been submitted for academic credit elsewhere, and acknowledge that the assessor of this item may, for the purpose of assessing this item: 

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Mark/Grade: _______________________________________________________________________________ Comments:___________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ _________________________________________________________________________________________ www.asb.unsw.edu.au Last updated: 17/08/12 CRICOS Code: 00098G

Page 1

UNSW Securities Research

COMPUTERSHARE LIMITED

14 April 2014

From technology to dividend
Highlights

CPU.AX



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

Recommendation:

BUY
Current Price:

$12.75
Price Target:

$14.27

Analysts:
Nathan Giang
I-Hsin Huang
Jack Huang
Lee Kadish
Jerome Peng Hoe Law

Company Data
52wk Range (A$)
Market Cap (A$m)
Shares O/S (m)
Price (14 May 2014 $A)
Volume

CPU vs. ASX 200

9.54 - 12.97
7,090...

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,
< http://www.computershare.com/Documents/IR/Financials/FY2012/Annual%20Report%202012.pdf>
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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