Hi-P

Re: Hi-P

Postby winston » Mon Jan 17, 2011 10:19 am

Not vested. From DBS:-

Hi-P up guidance again as demand overwhelms. According to revised guidance, the group revenues are expected to increase in 4Q10 over 3Q10, compared to the original guidance for flat sales q-o-q.

Our analyst has raised FY10F/11F by 5% and 11%, and expects new programmes to drive strength. Hi-P’s growth trajectory is accelerating and poised for more upside because

1) the exponential shipment growth of the tablets, by as much as 3x, is sufficient to generate substantially higher volume for Hi-P despite rising competition in the supply chain and

2) Hi-P is gaining traction in new smartphones which have just been launched in the US and are expected to be rolled out subsequently in new high demand locations such as China, Japan and South Korea.

Reiterate Buy with 32% upside to higher TP of S$1.43 (Prev S$1.30).
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Re: Hi-P

Postby winston » Mon Jan 17, 2011 1:44 pm

Not vested. From Lim & Tan:-

Hi-P has revised upwards its last guidance provided in early Nov ’10 from 4Q ’10 sales to be similar to 3Q ’10 to 4Q ’10 sales to be higher than 3Q ’10.

The better than expected sales performance reflects better than expected demand from key customers.

Hi-P’s key customers include Research In Motion, Apple, Gillette, Braun, Colgate, Seagate, etc.

This would be management’s 3rd positive revision in their provision of guidance since mid-2010.

The first positive revision was provided on 18 June ’10 and the stock had surged 13% on the day itself. When the company finally announced its 2Q ’10 results in early Aug ’10, the stock had surged a further 24%.

The second positive revision was provided on 21 Sept ’10 and the stock surged 11% on the day itself and when the company finally announced its 3Q ’10 results in early Nov ’10, the stock had surged a further 14%.

Hi-P had hit a high of $1.14 in early Oct ’10 before pulling back along with the market to hit a recent low of 90 cents in Dec ’10. It has since recovered to $1.08.

Similar to the previous 2 positive revisions, we expect there to be again a positive reaction ahead of its 4Q ’10 results release sometime towards the end of Feb ’11 (last year was 23 Feb ’10).

At 10x forward PE against growth of 60%, we maintain our BUY recommendation.
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Re: Hi-P

Postby Aspellian » Tue Jan 25, 2011 11:46 am

Quite an interesting trend of corporations adopting iPad... i first heard about this late last year of a top investment company in spore adopting iPad quite fast and many people bringing it along into meetings and have been endorsed by their IT dept as safe to use. there are even specific apps created for iPhone usage in that company for specific corporate purposes. These employees actually by the iPads themselves...ie. unlike companies that buy BlackBerries for their staff. But if corporates are to buy iPads like a typical executive arsenal of Laptop, BlackBerry, Smartphone... potential is there. See how BlackBerry flew in last 3-5 years.

So now if top corporations are using iPads, it will be a whole new dimensions... you can for eg. download presentation materials onto your iPads.. and you need not bring files of documents into meetings.. things can be retrieved. Video-conferencing etc.. potential is immense.

of cos, Hi-P should benefit if there are more advanced models of iPads that is customised for corporate use instead of mass-market consumption. Note that Hi-P only got Apple as a customer in 3Q last year... there will be quite a few more quarters of good performance especially when old inventories of a terminated program have been written down in 2Q last year. hopefully there are no surprises in glitches.

1Q2011 for Hi-P should also outperformed prior year 2Q2010... if Apple's iPads are selling like hotcakes especially in China, Hi-P may run more shifts even in CNY period - even if not in China but in Spore or other factories so as to meet orders. Apple will have insist that production run as normal... especially now there are floods of Tablets on the market. if there are no stocks of ipads in stores.. consumers may just choose the next available Tablet instead of waiting for a month for iPad... there are more choices. Apple will not want to miss out on this group of customers.

I even have a friend who bought iPad as a gift for his 70 year old father who is not tech-savvy at all but adapted very well to using iPad in reading papers, playing chess etc... user-friendly is important.

Chart-wise: Hi-P has broke out of previous high set in 3Q last year... so effectively there is now no stock overhang. rise in high volume, drop in low volume. good.

management: generally prudent, near to zero debts, net cash company, pays dividends. taking big write-off as evidenced in 2Q2010. I know some companies will delay such inventory write-offs for eternity....

remembered an article 2-3 years back that the CEO wants to grow the company to be the next Venture Corp and achieve sales consistently above Billion dollar... he only achieved that once in 2008 before market tanked.. at least he has the ambitious and guts. so probably now he managed to do it, if not in 2010, will be in 2011.

I also noted that Hi-P's major shareholder is a Nasdaq listed company, Molex Inc, which is also a supplier to Apple. which is probably how Hi-P got the Apple contract.

Just an interesting note: Most people/analyst still assocaite Hi-P's major customer as RIM (blackberry), smartphones as the main revenue source. so probably not many view Hi-P as a iPad manufacturer (yet).

Next thing i should probably analyse foxconn more. i heard that Foxconn is having negative margins on Apple contracts... anyone can comment? Especially 802 or Winston? Since you guys are intune with US stocks and China market in general. Thanks!

I am vested.. so take above with pitch of salt. 8-) (so i am hoping fund managers will read my post here!!! :lol: I cannot be more direct! hohoho!


Straits Times: Jan 25, 2011
Firms buying iPads - a sign of better times
Business spending expected to lead to pickup in jobs market, spark recovery


NEW YORK: The news last week that Apple's chief executive Steve Jobs is taking a medical leave of absence was a big story.

But something else about the company got far less attention and could be even more important to investors this year.

Corporations 'are adding iPads to their approved device list at an amazing rate,' Mr Peter Oppenheimer, Apple's chief financial officer, told analysts last week.

Apple's products, more known for their consumer appeal, are now used by employees of Wells Fargo, Archer Daniels Midland, DuPont and others.

Splurging on US$500 (S$640) iPads is a sign that the business cycle is starting to turn and that companies are starting to spend a record amount of cash they have accumulated.

If the trend is real, firms will do what consumers have not - spark a strong economic recovery. That could push the Standard & Poor's 500 index to its third straight year of double-digit percentage gains. The last time that happened: the tech-boom days of the late 1990s.

'You're going to see a bigger commitment to growth this year because companies have underspent for quite some time,' said Mr Bill Stone, chief investment strategist at PNC Asset Management.

Financial, technology and energy companies are the most likely to benefit from business spending, said Mr David Bianco, a market strategist at Bank of America.

Each group is up about 3 per cent this year, nearly one percentage point ahead of the overall S&P 500. Those three groups account for nearly half of the index's value.

The continued success of financial, technology and energy stocks would point to a new stage of this bull market, which has returned nearly 100 per cent since it began in March 2009.

'Consumers don't have the income growth to sustain a more rapid pace of spending,' said Mr Jeffrey Kleintop, a market strategist at LPL Financial.

Instead, he said, business spending will eventually lead to a pickup in the jobs market.

Corporate spending on technology helped IBM beat analyst expectations last week. Last Tuesday, IBM said that its 7 per cent jump in revenue came in part from companies in the United States upgrading their computer systems.

Energy companies, meanwhile, are leading the market this year with a 3.4 per cent jump due to higher demand, a sign of an improving economy. Oil company Schlumberger said on Friday profit in the most recent quarter rose 31 per cent.

And financial companies are benefiting from loans to businesses, a signal that those companies plan to expand. JPMorgan said on its earnings call last week that it added 400 middle-market companies as new commercial loan customers.

Is it too early to make a prediction that the biggest sectors of the market will continue to do well?

After all, investor sentiment is at a level not seen since the market hit its all-time high in 2007. That makes some contrarian investors nervous.

The market should continue to rise if history repeats itself. Since 1970, the top-performing industry groups in January have gone on to outperform the rest of the S&P 500 index over the rest of the year nearly 75 per cent of the time.

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Re: Hi-P

Postby winston » Tue Jan 25, 2011 11:55 am

Hi A,

I dont follow Foxconn that closely.

I know peter does.

I will send him a PM and asked him about his views for u.

Take care,
Winston
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Re: Hi-P

Postby peter » Tue Jan 25, 2011 2:05 pm

Hi A,
I don't follow Hi P. Comparing it to Foxconn, the later is the world's largest and many times the size and capabilities of Hi P. If I am bullish on electronics gadgets, foxconn would be the first one I look at. They make most of Apple's products. Their huge economies of scale usually is sufficient to make other competitors less competitive. Foxconn suffered from poor publicity lately. From my contacts it seems that the recent large pay increase only applies to top performing employees and not across the board as reported.
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Re: Hi-P

Postby Aspellian » Tue Jan 25, 2011 2:49 pm

peter wrote:Hi A,
I don't follow Hi P. Comparing it to Foxconn, the later is the world's largest and many times the size and capabilities of Hi P. If I am bullish on electronics gadgets, foxconn would be the first one I look at. They make most of Apple's products. Their huge economies of scale usually is sufficient to make other competitors less competitive. Foxconn suffered from poor publicity lately. From my contacts it seems that the recent large pay increase only applies to top performing employees and not across the board as reported.


Hi Winston,

thanks for introducing me to Peter.

Hi Peter,

thanks for your reply. I will look at Foxconn closely. Happy Chinese New Year! ;)

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Re: Hi-P

Postby Aspellian » Thu Jan 27, 2011 3:15 pm

Interesting community article on iPad usage in Spore education system:

http://forums.vr-zone.com/chit-chatting ... ssons.html

Image

140 students from Nanyang Girls’ High School began the week carrying brand-new Apple iPads in their school bags, given not by their parents but by their school.

Touted as “one of the first schools in Singapore to use iPad for lessons”, the pilot project, codenamed P21C² (Prototype 21st Century Class), aims to boost student engagement and their interest in learning, and at the same time keep up with today’s technologically-advanced society.

Students from two Secondary 1 classes and two Secondary 3 classes are involved in this programme, and iPads are used in the teaching of all subjects in these classes, gradually replacing the conventional pen-and-paper learning environment.

Principal Mdm Heng Boey Hong thinks it is not too early to start on this project as we embark on the second decade of the new millennium.

“In a 21st century world, knowledge is no longer simply disseminated, but co-created. Commonly referred to as ‘digital natives’, our present generation of students should be given a technology-enabled environment that meets their learning style,” she said.

Students are allowed to bring their iPad home, and there are no restrictions to which apps they can download from the App Store.
(Asp: Parents' interests may also be sparked, free marketing for iPad)

However, their portable personal learning device must include apps such as Keynote, *******, DocsToGo and eClicker, which the institution thinks “will effectively engage students by facilitating asynchronous interactions with their peers”.

Teachers will also select useful apps related to their respective subject, and students are required to download them.

When asked why the school chose Apple’s iPad over other alternatives, Mr Mark Shone, Subject Head/ICT of Nanyang Girls’ High told Yahoo! Singapore that the iPad offers a sizeable display for viewing of multimedia, has a long battery life, is lightweight, and the App Store features a huge library of educational apps with more are being developed.

Isabelle Loh, a Secondary 3 Nanyang Girls’ High School student, supports the school’s whole-hearted embrace of technology.

“For Math, the apps on the iPad help us learn trigonometry and geometry better by visually calculating triangle and circle angles, and getting the exact dimensions right. Moreover if students can’t comprehend what the teachers are saying, they can easily fire up the browser on their iPad and search it up online.”

Her classmate Lai Ying Ying, who is also involved in the iPad programme, has committed to exhibit self control to prevent her iPad from becoming a distraction to her studies. In fact, she believes the iPad is a useful learning device that helps facilitate independent, self-directed and mobile learning.

The programme, which officially commenced earlier this week, is currently in its preliminary stage and the school will continue to make improvements as time goes by.

Each student is issued a 32GB Wi-Fi iPad model, which comes with a price tag of $878 on the Apple Online Store. The cost of the tablets are fully absorbed by the school.

Nanyang Girls’ High School joins Tampines Secondary School, Dunman Secondary School and Nanhua Primary School in the list of schools that have given the iPad a trial, according to Ministry of Education.

Meanwhile, Maris Stella High School and School of Science and Technology (SST) make it compulsory for students to purchase a MacBook, which is being used during lessons.

The impact of students having a laptop or tablet for lessons on their academic results is still an ongoing debate among educators.

“There is very little evidence that kids learn more, faster or better by using these machines,” said Larry Cuban, a professor emeritus of education at Stanford University.

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Re: Hi-P

Postby winston » Wed Feb 23, 2011 6:09 pm

Not vested. From DBS:-

4Q10 net profit of S$35.9m for Hi-P International exceeds expectations slightly but core results were significantly better.

Ramp of new programmes drove sales while operating leverage and cost control lifted margins. DPS raised to 3.6 Scts from 3 Scts.

Maintain Buy and S$1.43 TP.
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Re: Hi-P

Postby winston » Fri Feb 25, 2011 9:20 am

Not vested. From UOBKH:-

Earnings Revision/Risk
• We forecast core earnings growth of 33.1% for 2011 and 11.1% for 2012.


Valuation/Recommendation
• Our target price of S$1.64 is based on 2011 PE of 12.5x. This offers a price upside of more than 40%.

Share Price Catalyst
• Growth in shipment of smartphones and media tablets for blue-chip customers RIM and Apple.
• New product launches from Apple.
• Securing EMS projects from RIM and Motorola.

http://research.uobkayhian.com/research ... 627811.pdf
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Re: Hi-P

Postby winston » Tue Mar 01, 2011 6:47 pm

Not vested. From Lim & Tan:-

In response to SGX’s query on the company’s 4Q ’10 surge in inventories (+64% yoy), receivables (+99%) and payable (+80%), management said that the increases were about in line with the significantly higher business activities in 4Q ’10 versus a year ago.

For example 4Q ’10 sales surged 102% yoy while cost of sales rose 76% yoy and inventory turnover days was 35 in 4Q ’10 versus 37 a year ago while receivable days was 70, unchanged from a year ago. And payable days was 77, up about 2 days versus last year’s 75 days.

And management also explained that the higher inventories on their books is also to prepare for significantly higher sales in 1Q 2011.

This likely explains their recent aggressive share buy backs in the market after having last bought back shares in Oct ’10.

We have a BUY recommendation on Hi-P.
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