* Bright World Precision Machinery: This stock was a multi-bagger in 2010 as its earnings raced ahead (more on this in the link below).
In the interview with The Edge, CEO Shao Jian Jun highlighted the company’s recent open-tender win of a contract to supply a 1,250 tonne high-performance metal-stamping machine for use in manufacturing engine parts for high-speed trains.
This is Bright World’s first ever supply to the locomotive sector, and the CEO is hoping for contracts to supply to manufacturers of train seats and doors.
The railway sector offers big business potential as China is investing RMB800 billion to build 6,000 km of high-speed rail lines by 2012 to speed up industrial development inland.
For the automotive sector, which contributed about 32 percent of its sales, Bright World’s CEO is hoping to increase its sales by a massive 40% to 50% to that sector this year.
Underscoring its confidence in the opportunities in the auto sector, Bright World is planning to build a manufacturing plant in Shenyang to serve the automotive hub in north China.
Based on UOB Kay Hian's own projected 23% increase in sales and 43% surge in earnings, the stock broker is recommending a 'buy' on the stock and a price target of 70 cents. (note that the 23% sales projection is about just half of the Bright World CEO's forecast).
Recent stories:
BRIGHT WORLD: Stellar growth, continued dividend payout expected this year
2010's sizzing multi-baggers - SIM SIANG CHOON, COMBINE WILL, BRIGHT WORLD, SUNVIC
The two companies were making losses before Techcomp acquired them.
“The deficit has been narrowed significantly. Hopefully, they will return to the black this year,” said Mr Lo. “We are helping them lower costs by making some parts for them. Our target is to bring down their cost by 20%.”
The acquisitions have enlarged Techcomp’s product portfolio as well as brought in new technology knowhow and manufacturing skills, said Mr Lo.
They have also allowed Techcomp to ride on their European brand names in order to sell its products in Europe.
Last year, Techcomp achieved a record US$10.5 million in net profit.
CIMB Reearch analyst Gary Ng expects Techcomp to report a 46.7% jump in earnings per share this year to 6.6 US cents. He raised his price target on the stock from 55 cents to 83 cents.
Recent stories:
TECHCOMP: US fund manager, major shareholder shares insights with analysts
TECHCOMP: Record profit of US$10.5 million in FY2010, Europe to contribute to bottom line this year.
