DBS Research has downgraded Meiban to Hold from Buy;
TP: S$ 0.38 (Prev S$ 0.68).
1Q08 net profit of S$3.5 (+15% y-o-y, - 50% q-o-q) was below our expectations of S$4.5m.
Turnover was S$122m (- 4%y-o-y, -16% q-o-q) against our S$140m forecast due to slower orders from its key customers Dyson and HP.
A slowdown in consumer spending in the US and other parts of the world could slow orders further.
We think 2Q08F revenue growth could range from slightly negative to flat y-o-y due to lower revenue base in 2Q07, but the real challenge would be in 2H08 due to a higher revenue base in 2H07.