Silverlake Axis Ltd – A new growth driver with MOBIUS April 21, 2023 468

PSR Recommendation: BUY Status: Maintained
Last Close Price: 0.27 Target Price: 0.49
  • With Siam Commercial Bank, MOBIUS has secured a major win for its cloud banking SAAS. Further opportunities arise from several banks’ legacy core banking systems reaching their end-of-life. We expect a jump in banks looking to upgrade to a MOBIUS core.
  • As an AWS partner, Silverlake could reach more players in Malaysia with the AWS investment of US$6bn into cloud infrastructure in Malaysia. With the option of a multi-tenanting platform utilising MOBIUS, smaller banks now can adopt MOBIUS.
  • We maintain BUY with an unchanged target price of S$0.49. Our FY23e estimates remain unchanged. Our target price is pegged to 20x P/E FY23e. We expect MOBIUS and the recovery in bank IT spending after two cautious pandemic years to be the key growth drivers for the company.


Collaboration with Siam Commercial Bank

In December 2022, Silverlake announced an agreement with Siam Commercial Bank (SCB), one of Thailand’s top five banks, to deploy an innovative transformation strategy with the use of the MOBIUS platform. MOBIUS was deployed under AutoX, SCB’s microlending arm, and designed to reach Thailand’s unbanked and unbankable population. With the use of MOBIUS, which is available on both hybrid and public clouds as a Software-as-a-Service (SaaS) offering, AutoX was able to deliver new products at a faster speed and lower cost. For example, with MOBIUS, customers were able to submit an unsecured loan application directly online with immediate account opening, credit scoring and funds dispersed. New products can be launched in a few hours by just defining parameters such as loan type, fees, price, etc. Current mainframe core banking software requires the programming of new code to add features or create a new product.

AutoX has a targeted loan portfolio of THB70bn by 2025 – generated from potentially 3,000 sales points. Furthermore, it is on track for its targeted IPO by 2027. We feel that Silverlake has shown the proof of concept and significant reference site for MOBIUS and we could see more inquiries for the rest of 2023.

*Link to Silverlake and SCB’s collaboration:



Potential for replacing core banking systems

Fidelity National Information Services (FIS), which provides core banking systems, has 5-6 banks with core banking systems in the region approaching their end-of-life by end 2023. This presents an opportunity for MOBIUS. Silverlake can offer MOBIUS as a core cloud banking system to these banks. Previously, it was hard to move a bank away from its existing core banking system as it was too costly and time-consuming to switch to a brand new core. However, with these banks existing core banking systems reaching expiration, Silverlake would be able to promote MOBIUS as a core without the previous limitations. We feel that this could provide a big boost to Silverlake as banks start to move from a traditional core to a fully cloud based core. Cloud reliefs the bank of many security challenges at scale and SAAS provides continuous updates with less costly upfront licensing.

Creating opportunities in Malaysia

In March 2023, Amazon Web Services (AWS) revealed an investment of US$6bn into Malaysia and the launch of an infrastructure region. Silverlake is currently an AWS partner and uses its cloud infrastructure for MOBIUS. With the development of infrastructure in Malaysia, Malaysian banks would be more likely to collaborate with Silverlake for either an upgrade to MOBIUS or to utilise it to expand its digital capabilities.


Outreach to smaller regional banks

As MOBIUS is cloud native, Silverlake is able to run a multi-tenanting platform, where several banks share the same cloud platform but are differentiated by their own passwords and security. In a way, this is like a building with multiple tenants, and each has his own “house” with keys to access the data and information. This is much more cost effective and products are released faster, which allows smaller banks to compete with the bigger players who would take months to configure and release a product. We feel that this would allow MOBIUS to reach smaller players who would otherwise not have the opportunity to use such a system.

Investment Actions

We maintain a BUY rating on Silverlake Axis Ltd with an unchanged target price of S$0.49. Our FY23e estimates remain unchanged. Our target price is pegged to 20x P/E FY23e. It is at 20% discount to peer valuations of around 25x PE (Figure 1).

Our target PE of 20x is 8% higher than the historical average PE of 18.5x (Figure 2). In our view, Silverlake should trade at a higher premium to its historical PE with the introduction of MOBIUS and the resumption of bank IT spending after the pandemic.

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About the author

Profile photo of Glenn Thum

Glenn Thum
Research Analyst

Glenn covers the Banking and Finance sector. He has had 3 years of experience as a Credit Analyst in a Bank, where he prepared credit proposals by conducting consistent critical analysis on the business, market, country and financial information. Glenn graduated with a Bachelor of Business Management from the University of Queensland with a double major in International Business and Human Resources.

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