by winston » Mon Oct 24, 2011 12:31 pm
not vested
Singapore Hot Stocks-Hi-P falls after firm forecasts profit fall
SINGAPORE, Oct 24 (Reuters) - Shares of Singapore contract manufacturer Hi-P International, fell as much as 6 percent after the company forecast third quarter profit to fall from its second quarter.
By 0257 GMT, Hi-P shares were down 4.3 percent at S$0.56, underperforming the broader Straits Times Index <.FTSTI>, which was up 1.7 percent.
Hi-P, which supplies parts to the telecommunications, consumer electronics and computing industries, said on Monday that higher labour and material costs are likely to offset increased revenue coming mainly from new projects.
[ID:nSNZ5mXgsz] DMG & Partners Securities said in a report that the poor results are mainly due to margin compression as the company faces downward pricing pressure from its customers, particularly Research in Motion .
Full-year gross margin is forecast to fall by three percentage points year-on-year to 16 percent, DMG said, adding that the risks of reduced average selling prices and rising labour costs remain its key concerns.
However, the brokerage said that Apple has been opening up its supply chain, bringing in new vendors and encouraging more competition among the suppliers. This move may provide opportunities to Hi-P, DMG said.
Source: Reuters
It's all about "how much you made when you were right" & "how little you lost when you were wrong"