Censof hits 30-month high on heightened investors’ interest. Can it sustain?

Censof Holdings Bhd has gained almost 20% in over two days to close at 37 sen on June 12.

Strong buying interest in the counter lifted its share price to touch its 30-month high of 40 sen before closing at 37 sen.

It appears that the counter is poised for further upside with follow-through buying to boost prices towards the resistance levels of 40.5 sen and 44 sen.

Over the past year, Censof has surged some 54.2%, after hitting a low of 20 sen in November last year.

Its net profit fell to RM4.6 million in the financial year ended Mar 31, 2024 from RM5.9 million in the previous year.

This was on the back of slightly higher revenue of RM104.7 million versus RM102.8 million.

The financial management solutions provider was dragged by the local councils was delaying contract renewals pending the implementation of national ePBT 3.0 for all local councils’ system.

Moving forward, it believes the recent Budget 2024 provides another opportunity with the introduction of mandatory einvoicing for taxpayers with annual income or sales exceeding RM100 million, starting from August 1, 2024.

E-invoicing for taxpayers in other income categories will be enforced in phases, with a comprehensive implementation target of July 2025.

Censof said it will continue to play a key part in meeting the evolving digitalisation needs of the public and private sectors and e-invoicing mandate opportunities by leveraging on its strength.

To mitigate the risk of fluctuations in currency exchange rates, the company said it will closely monitor currency trends and adjust our procurement strategies as needed to mitigate any potential negative impacts

Late last year, there were pockets of positive news flow for Censof.

In December, it bagged a RM9.46 million contract from the Road Transport Department (JPJ) for the maintenance, verification and calibration services of 48 weighing instruments at enforcement stations.

In July, Censof secured a RM13.38 million contract from the Companies Commission of Malaysia to develop a financial management system.

The contract also pertains to the supply, implementation, warranty, support, maintenance, and licences of the financial management system.

Surely, these small pockets of contracts are positive to Censof but it would need to win more contracts in order to show higher revenue and subsequently net profit.

In the meantime, there is trading opportunity for the software company as it charts towards better financial performance and this would eventually be reflected in its share price.