Monday, August 26, 2013

Amtek Engineering : Improving momentum (DBSV)

Amtek Engineering Limited:
HOLD  (Upgrade from Fully Valued)
Improving momentum;
Price Target : 12-Month S$ 0.48 (Prev S$ 0.45)

•4Q13 core below but sequential improvement suggests worst is over for now
•New programmes and continuous cost management to drive core earnings growth
•Upgrade to Hold, upped TP to S$0.48 on earnings rollover to FY14F

Small operating losses in 4Q13 vs S$2m profit forecast due to restructuring costs.Headline net profit of S$10.9m included a S$10.8m gain from the divestment of a factory building. Without this gain, 4Q13 would be a small loss of S$0.1m, compared to S$2m forecast. Key variance was c.S$5m of capacity restructuring expenses.

Sales and margins improved sequentially. Sales fell 7% y-o-y but rebounded 9% q-o-q to S$160.7m. Except for Mass Storage and Consumer Elec., all segments grew q-o-q and performed better than expected, thanks to new programmes which offset softer end market demand. Tooling sales hit another record high on more wins, indicating a strong pipeline of new progammes awaiting mass production. Gross margin was 14.6% (4Q12:16%, 3Q13:13.5%).

FY14F core performance to grow. Firstly, high tooling sales would begin to contribute, especially in Casings/Enclosures and Automotive. Notwithstanding weak HDD industry, management is positive on a new baseplate programme. Secondly, margins would sustain or improve, benefiting from continuous consolidation and automation to combat rising labour costs. Our margin assumptions are conservatively kept flat amid volatile market demand. Stronger than expected end market demand would pose margin upsides.
Forecast maintained, upgrade to HOLD. TP raised to S$0.48 on earnings rollover to FY14 PE. Customer sentiment has improved but growth finally depends on end demand, which at the moment, remains short term. Hence, we recommend Hold for its 6-7% dividend yield while waiting for more growth conviction to emerge.

Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 26/08/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock