FPI

FPI

Postby winston » Wed Nov 13, 2019 8:59 am

not vested

Trading Buy: FPI - 9172
Solid net cash, strong DY and attractive valuations
(Last price: RM1.60, Potential upside +16.3%)


Company Profile

FPI (listed in June 1994) is a leading contract manufacturer for speakers, audio components, and musical instruments. Overall, the audio system and component segment and musical instrument division contribute about 70-80% and 20-30% to revenue, respectively.


Trading Catalyst

We like FPI due to its fruitful diversification from conventional speakers into richer margins audio system and component/ musical instrument segments coupled with the synergistic partnership with an established global EMS, Wistron (parent company with 28% stake).

Despite facing higher costs, FPI’s prospects remain bright, driven by
(i) bullish speaker market outlook
(ii) capacity expansion
(iii) strategic tie-up with Wistron
(iv) weak RM and
(v) beneficiary of the US-China trade war.

In anticipation of a seasonally stronger 3Q results, the stock is ripe for a relief rebound towards RM1.65-1.86.

Technical View
Resistance: RM1.65 / RM1.74 / RM1.86
Support: RM1.53 / RM1.50
Cut loss: RM1.48

Key Financial Stats
Trading at 11.4x trailing P/E (23% below peers), supported by RM0.65 net cash and 6.3% DY.

Source: Bloomberg, HLIB
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: 118537
Joined: Wed May 07, 2008 9:28 am

Re: FPI

Postby winston » Wed Oct 14, 2020 9:10 am

not vested

We like FPI (RM1.52, Not-rated) due to its fruitful diversification from conventional speakers into richer margins audio system and component/ musical instrument segments coupled with the synergistic partnership with an established global EMS, Wistron (parent company with a 28% stake).

Save for the unprecedented FY20 results due to Covid-19, FPI’s LT prospects remain bright, driven by
(i) positive speaker market outlook with consumers’ rising needs and expectations around personalisation, lifestyle and customisation
(ii) capacity expansion
(iii) strategic tie-up with Wistron
(iv) beneficiary of the US-China trade war due to trade diversions and
(v) travel curtailment to boost consumer electronics spending.

Valuation is undemanding at 13.6x P/E (23% lower than peers), supported by solid balance sheet with RM0.59 net cash and 5.8% dividend yield (132% higher than peers).

In anticipation of a seasonally stronger 3Q results (vs 2Q), the stock is poised for a LT downtrend line breakout (from RM1.80 on 18 Feb 2019).

A successful breakout above RM1.56 barrier will spur prices higher towards RM1.62-1.80 territory.

Key supports are pegged at RM1.43-1.48. Cut loss at RM1.42.

Source: HLIB
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: 118537
Joined: Wed May 07, 2008 9:28 am


Return to E to K

Who is online

Users browsing this forum: No registered users and 8 guests