D&O

D&O

Postby winston » Thu Mar 14, 2019 8:56 am

not vested

Trading Buy: D&O-7204
(Last price: RM0.695, Potential upside +15.1%)


Company Profile

D&O offers packaging solutions (assembly and testing) for LED products. Specifically, D&O focuses on automobile LED with ~95% of 2018 revenue contributes by automobile-related products

Trading Catalyst

D&O, a world leading LED packaging solutions provider, is strategically-positioned to partake in the multi-year revolutionary change in the automobile lighting industry

The stock is steeply oversold after sliding 31% from 52W high of RM1.00 to RM0.695 has grossly priced in the short term worries of a weaker 1Q19 results due to the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) regulation as well as the US-China trade war.

However, a promising industry outlook, expectations of a US-China trade deal, capacity expansion and an improving product mix could bolster D&O’s earnings outlook over the medium to long term.

Technical View
Resistance: RM0.715 / RM0.755 / RM0.800
Support: RM0.675 / RM0.650
Cut loss: RM0.645

Key Financial Stats

Trading at undemanding 16x FY19E (40% and 50% discounts to its German competitor – OSRAM 27x and 2Y average P/E of 32x), supported by 30% EPS FY18-20 CAGR

Source: HLIB
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston
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