Silverlake is Asia&rsquo s leading software services and solutions provider. Silverlake is currently looking to offer and implement software solutions to a few Malaysian banks, with the purpose of replacing existing core banking systems.

 

The estimated contract value of these contracts range around MYR150-200 million for each bank and RHB believes that Silverlake is likely to secure a contract by the end of 2017.

 

Special dividend from sale of Global Infotech

 

Silverlake is expected to record a S$27.7-million gain and receive proceeds of about S$0.04 per share after fully disposing its intended allocation-for-sale shares in Global InfoTech (GIT).

 

This divestment exercise would take some time to complete and is expected to be done by 2HFY17. RHB believes that a sizeable amount of the proceeds from the sale will be returned to shareholders as special dividends.

 

New area of growth: insurance

 

Meanwhile, Silverlake is also focusing its growth efforts on its insurance arm. The management might engage in some merger and acquisition (M& A) activities in this space in the near term to grow its insurance segment.

 

Organically, Silverlake&rsquo s insurance arm is already growing at an impressive 20-30 percent per annum. This is not forgetting that the company has yet to expand across South-East Asia.

 

RHB foresees growth for Silverlake&rsquo s insurance segment to pick up steadily, supported by inorganic growth and through possible acquisitions of other private companies.

 

Silverlake (SGX:5CP) &ndash BUY, Target Price $0.77