A Close Look at Allegations Arising Against Temenos
By Newztodays Team
Hindenburg Research has released a short report on irregularities and allegations arising against TemenosTemenos.
About Hindenburg Research: Hindenburg Research specializes in forensic financial research.
While they use fundamental analysis to aid investment decision-making, their research results also come from uncovering hard-to-find information from atypical sources.
In particular, they often look for situations where companies may have any combination of (1) accounting irregularities, (2) bad actors in management or key service provider roles, (3) undisclosed related-party transactions, (4) illegal/unethical business or financial reporting practices, and (5) undisclosed regulatory, product, or financial issues.
About Temenos: Temenos was incorporated in Glarus, Switzerland. The Company and its subsidiaries are engaged in the development, marketing, and sale of integrated banking software systems.
The Group is also involved in supporting the implementation of the systems at various customer locations around the world and the implementation and running of systems in cloud environments, as well as offering helpdesk support services to existing users of Temenos software systems.
The customer base consists mostly of banking and other financial services institutions.
Temenos relationship with System Limited (SYS): SYS owns 100% of National Data Consultant (Pvt.) Limited (NdcTech), a leading core and digital banking implementation service provider, along with its subsidiaries/associated companies in the UAE and Singapore.
On December 15, 2022, Temenos signed an agreement to grant license rights to NdcTech to develop further and market the Temenos Country Model Banks on top of the Temenos open platform for financial institutions in these seven Middle Eastern countries.
Revenue and Earning Contribution: Temenos contributes around 7% to SYS’s consolidated revenue and profits, as per management. In 9M2023, SYS’s consolidated revenue was Rs37bn, of which 7% (Rs2.6bn) is coming from Temenos.
Similarly, in 9M2023, SYS’s consolidated profit was Rs7.1bn, of which 7% (Rs0.5bn) is coming from Temenos.
Temenos stance on allegations: The Board of Directors of Temenos fundamentally refutes the report published by Hindenburg Research.
The management believes that the report contains factual inaccuracies and analytical errors, together with false and misleading allegations, which are intended to adversely impact the Company’s share price.
The Company is confident in the strength of its business, financial performance, and cash position. Stock Market Loses over 1000 Points Amid Tension with Iran
Temenos will announce full-year 2023 audited financial results on February 19, 2024, and will hold a Capital Markets Day for investors on February 20, 2024.
We continue to maintain a ‘Buy’ stance on SYS, with a Target Price of Rs580/share, offering a potential upside of 52%.
SYS is currently trading at 2023E and 2024F PE ratios of 12.3x and 9.5x, respectively” Topline Research said.
