Hi-P

Re: Hi-P

Postby winston » Wed Aug 06, 2008 12:07 pm

Small position to follow story..

From Lim & Tan:-

Still Reasonable Valuations S$0.585-HIPL.SI

2Q2008 net profit rose 101% yoy and 9% qoq to $27.1mln on the back of 40% yoy and 5% qoq increase in sales to $282mln, bringing 1H2008 net profit up 81% yoy to $51.8mln and 1H2008 sales up 38% yoy to $551.5mln.

The key driver for 2Q2008 was the wireless telecom division which saw sales rise 94% yoy and 14% qoq to $186.5mln (66% of sales) which was offset partially by 10% yoy and 11% qoq decline in the consumer elec and computing division to $95mln (34% of sales). Key customers in the wireless division are Research In Motion, Nokia and Motorola.

Gross margin in 2Q2008 was 18%, unchanged from1Q2008 but up from 14% a year ago, due to better product mix and economies of scale.

Forex loss narrowed 56% yoy and 92% qoq to $596,000.

Provision for inventory obsolescence and inventory provision was $3.18mln, up from $1.08mln a year ago and $2.45mln a quarter ago.

Impairment of fixed assets and writeoff was $2.9mln, up from zero last year and $2.5mln a quarter ago.

Due to solid working capital management, cash conversion cycle shortened to 43 days versus 45
days in 1Q2008 and 51 days last year. This resulted in operating cash flow improving 133% yoy to
$27.3mln, more than sufficient to cover capex of $3.5mln. Financial position is robust with cash of
$134.2mln versus debts of $41mln, giving a net cash position of $93.2mln. This represents about 18% of its current market cap of $519mln.

Looking ahead, management expects 3Q2008 sales to be lower than 3Q2007, but profit to be higher. Management also expects 2H2008 sales to be similar to 1H2008, but profit to be lower.

We are maintaining our full year forecast at $85mln, implying 2H2008 net profit of $33.3mln which is up slightly from last year’s $31.5mln, but down from 1H2008’s $51.75mln.

At 6x forward PE (against 42% growth), 0.5x sales and 1x book (versus ROE of 17%), valuations remain undemanding hence we maintain BUY.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118541
Joined: Wed May 07, 2008 9:28 am

Re: Hi-P

Postby winston » Wed Aug 06, 2008 12:40 pm

From UOB-Kay Hian:-

Hi-P International

2QFY08: Improved performance driven by wireless business

Hi-P reported a strong 2QFY08 net profit of S$27.1m, +101% yoy and 4% qoq, on revenue of S$281.5m, +39.8% yoy and 9.7% qoq, in line with our forecast of S$277.5m.

Driven by wireless. Sales from the wireless segment accounted for 66.1% of group revenue, surging 14.2% qoq and 93.9% yoy to S$186.5m in 2QFY08. The credit for the robust performance should go to Research in Motion (RIM), Hi-P’s largest client. RIM”s revenue contribution expanded to over 30% of sales in June, up from only 20% in FY07. Revenue contribution from Nokia progressively inched higher as well. With a low-end product introduced to the Dongguan plant in 2QFY08, and more high-end projects to be launched in 3QFY08 in Shanghai, we expect the contribution from Nokia to increase steeply in 3QFY08.

Net margins jumped to 9.6% from 6.7% in 2QFY07. The margin improvement was driven by an increase in orders for high-end smartphones, greater insourcing and a steady US dollar.

Guided similar revenue but lower profit in 2HFY08, but already factored in. Hi-P has guided lower revenue but higher profit in 3QFY08 compared with a year ago. It also expects 2HFY08 profit to be lower than in 1HFY08 with similar revenue. The guidance is in line with our forecast. We estimate
full-year earnings of S$90.4m, with 1HFY08 results representing 57% of our FY08 forecast.

The lower profit in 2HFY08 was mainly due to the following:
1) RIM is reviewing the whole supply chain and qualifying additional electronic manufacturing services (EMS) companies. As a result, orders from RIM have been temporarily reduced during this period, from June to August. A new project has also been pushed back by about four weeks
from July to early-September. However, Hi-P’s management is confident the adjustment would not affect its relationship with RIM, and the current orderbook indicates that production will bounce back to the previous level from September onwards.

Losses from Polish plant were dramatically reduced.
Production of kitchenware for Braun at the Polish plant switched from full turnkey to consignment in May and is expected to be completed in Oct 08. We expect lower revenue to be generated from the consignment model and project revenue contributions of S$69m and S$45m from Poland in FY08 and FY09 respectively. The breakeven point has been pulled back to early-FY09. However, the shift will help relieve pricing pressure from suppliers, allowing Hi-P to focus on improving capacity and production yield.

Maintain BUY. We remain positive on the stock and expect Hi-P to benefit from continued growth in the mobile handset market with RIM and Nokia in FY08. Our target price is S$0.83 based on FY09 PE of 7x.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118541
Joined: Wed May 07, 2008 9:28 am

Re: Hi-P

Postby winston » Fri Aug 29, 2008 12:21 pm

Vested. From UOB-Kay Hian.

Hi-P: riding on smartphone boom. The smartphone industry maintained robust growth in 2008 despite widespread concern over reduced technology spending. According to IDC, smartphones are seeing growth rates of about 40.0% yoy in 2Q08.

Research in Motion (RIM) held onto the second place in the global vendor rankings and improved its global market share from 8.3% to 13.4% in 1Q08.

Hi-P is well positioned to take advantage of RIM’s market share gains and steady volume growth as it is one of RIM’s largest suppliers in Asia (fulfilling 50-60% of RIM’s annual requirements).

We maintain BUY on Hi-P, with a target price of S$0.83 based on 7x FY09 PE. We have applied a multiple close to the low end of Hi-P’s five-year historical range due to uncertain market conditions.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118541
Joined: Wed May 07, 2008 9:28 am

Re: Hi-P

Postby winston » Mon Oct 13, 2008 4:12 pm

Vested. From DBS:-

Hi-P International is hopeful of hitting $1 bn turnover in the current financial year. The company said that there has not been a slowdown in orders, despite the volatile economic climate.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118541
Joined: Wed May 07, 2008 9:28 am

Re: Hi-P

Postby winston » Mon Oct 13, 2008 4:27 pm

From Kim Eng:-

Hi-P International – The contract manufacturer is hopeful of hitting $1bn turnover in the current financial year. For the six months ended June 30, the company reported revenue of $551.5m, up 37.6%, while net profit jumped 81% to $51.75m.

Hi-P founder and chief executive Yao Hsiao Tung said that there has not been a slowdown in orders, despite the volatile economic climate. He said Hi-P’s profitability is very healthy and it has an extremely strong cash position. The company's cash balance was $134.2m at June 30, which puts it in a good position to ride out any contraction in lending.

Mr Yao said that customer diversification efforts have also borne fruit, with no customer accounting for more than 30% of business. Hi-P clients include Blackberry maker Research In Motion (RIM), Motorola, Procter & Gamble, Nokia and Samsung.

Hi-P's revenue was hit previously by lower orders from a key customer, thought to be Motorola. Hi-P intends to focus on vertically integrating its services from tooling and metal stamping to assembly of printed circuit boards, Mr Yao said. Although he does not think that Hi-P will be much affected by the worsening credit crunch, management has taken several steps to be doubly sure.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118541
Joined: Wed May 07, 2008 9:28 am

Re: Hi-P

Postby winston » Wed Nov 05, 2008 8:30 am

HI-P’S Q3FY2008 NET PROFIT SURGES 55-FOLD TO S$25.5 MILLION

- Four quarters of consistent growth since Q4FY2007
- Better customer, product mix and cost rationalisation programme yield positive results
o Achieves Gross Profit Margin of 16.9% and Net Profit Margin of 10.1%
- Revenue declines marginally by 3.4% to S$253.5 million
o Change to partial consignment model at Poland plant
- Reduction in foreign exchange losses with reduced fluctuation in USD
- Strong net cash position of S$96.6 million
- Expects better revenue and profit in FY2008 compared to FY2007

http://info.sgx.com/webcoranncatth.nsf/ ... penelement
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118541
Joined: Wed May 07, 2008 9:28 am

Re: Hi-P

Postby winston » Wed Nov 05, 2008 2:11 pm

From DBS:-

Hi-P International‘s 3Q08 net profit at S$25.5m (+ 53.5x yoy and –5.7% q-o-q) was 27% above our expectations of
S$20m. Gross margin improved significantly to 16.9% from 7.7% last year.

Maintain BUY rating for Hi-P; target price of S$0.58. The company has net cash of 10.8 cents per share and being the biggest plastic player in Singapore with strong customer base, it should remain profitable even in the worst-case scenario.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118541
Joined: Wed May 07, 2008 9:28 am

Re: Hi-P

Postby winston » Wed Nov 05, 2008 5:22 pm

From Lim & Tan:-

Undemanding Valuations But Prospects Are Uncertain S$0.36-HIPS.SI

In line with management’s guidance, 3Q ‘08 sales fell 3.4% yoy and 9.9% qoq to S$253.5mln due to lower demand from some handset and consumer elec customers and change in partial consignment model (from turnkey) at the Poland plant.

However, gross margin improved from 7.7% to 16.9% due to absence of provisions, better product and customer mix. Forex loss reduced from $3.2mln to only $0.3mln due to the lesser depreciation of the US$ against the RMB. Other
operating income rose 227% yoy to $3.9mln due to tax refunds. As a result, bottom-line surged from a year ago’s $468,000 to $25.5mln. However sequentially, it fell from last quarter’s $27.1mln due to weaker orders from both the handset and consumer elec customers.

Looking ahead, management is reversing from their previous guidance that 2H ‘08 revenues will be similar to 1H ‘08 revenues and now expect a weaker 2H ‘08 due to the global economic downturn and change in partial consignment model at the Poland plant. 4Q ‘08 sales and profit is expected to be lower yoy and 2H08 sales and profit is expected to be moderately lower than 1H ‘08
.
This suggests that 4Q ‘08 revenues and profit will be around $295mln and $25-26mln respectively, down from $313.3mln and $31mln last year, giving a full year 2008 sales of $1.1bln (+13%) and profit of $103mln (+72%).

At 36 cents a share, market cap is $319.38mln, price to sales is 0.3x, PE is 3x, price to book is 0.6x. Financial position is robust with cash of $109mln versus debts of $12.5mln, giving a net cash position of $96.5mln, representing about 30% of its current market cap.

Valuations are not demanding and the stock could see a near term relief rally (given its oversold condition), but tough YOY and QOQ comparisons going forward coupled with profit warnings from its major customers recently (RIM, Seagate,
Motorola) and tough outlook given by other major customers such as Nokia, Gillette and Braun would likely cap a sustainable upside rally as well.

Short term investors could adopt a trading buy stance (our last call was a HOLD).
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118541
Joined: Wed May 07, 2008 9:28 am

Re: Hi-P

Postby winston » Tue Nov 11, 2008 9:55 am

From Phillips:-

Hi-P Int'l - 3Q08 Results (Joshua Tan)
Recommendation: BUY (maintained)
Previous Close: S$0.37
Fair Value: S$0.62

Revenues slightly tapering off QoQ – signs of impending global recession.

Smartphone volumes resilient but weakness in normal handsets and consumer electronics.

But Profit is resilient as Operating and Net Margins improve.

Cash horde building up (S$96.6m) and debt paid down to negligible.

Company in good position to gain market share as the credit crunch and recession threatens less
well-managed competitors.

BUY if you have a one-year horizon, at S$0.37 Hi-P is trading at distressed levels when the company clearly is financially sound with net cash building up to S$0.108/share for 3Q08. Hi-P could surprise at the end of this turmoil to survive major competitors.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118541
Joined: Wed May 07, 2008 9:28 am

Re: Hi-P

Postby iam802 » Tue Nov 11, 2008 11:09 am

A TA review of Hi-P.

1. Today's trading price is around 0.365 - 0.37. Volume at 10.45am is around 217k

2. From the trendlines and the kumo, we can safely say that current trend is down.

3. There is a very strong resistant line at 0.365 as it has been previously been a critical support line on Sept 18 and Oct 8. In TA, after support is broken, we consider the line as resistant (support turn resistant).

4. The forward kumo also has a resistant level at 0.365. Looking at the thickness of the kumo, we can say that lots of resistant is expected moving forward in the next few months.

5. Also take note of the high volume selling on Nov 5. Have all the BB sold off their positions already?

6. With the downturn to be fairly extended, I think we can review Hi-P again after their next quarter results.


Image
1. Always wait for the setup. NO SETUP; NO TRADE

2. The trend will END but I don't know WHEN.

TA and Options stuffs on InvestIdeas:
The Ichimoku Thread | Option Strategies Thread | Japanese Candlesticks Thread
User avatar
iam802
Big Boss
 
Posts: 6353
Joined: Wed May 07, 2008 1:14 am

PreviousNext

Return to H to K

Who is online

Users browsing this forum: No registered users and 7 guests