Excerpts from latest analyst reports.....
DBS Vickers expects 'magnificent rebound' in 2H by HI-P INTERNATIONAL
Analyst: Tan Ai Teng
• Weak Q2 but second half to see magnificent rebound
• Ramp up could start as early as Jul/Aug, driven by new smartphones and tablets for Apple, Amazon, RIM etc
• FY12/13F adjusted by -4%/14%
• Upgrade to Buy, +22% to higher TP of S$0.91
At current valuations, Hi-P is cheaper than the average for its peers (16.6x FY12, 12x FY13).
Excluding net cash per share of S$0.14, the stock is even more compelling at 9.6x FY12 PE.
Hi-P’s meaningful engagement with Apple started with iPad and historically, share prices have rallied ahead of new iPad launches.
Given that the company is growing bigger in its engagement in next generation smartphones, we urge investors to position in the stock ahead of the new launch. Upgrade to Buy.
Recent story: HI-P INTERNATIONAL confident of higher revenue, profit in FY12
UOB KayHian says 'buy' COMFORTDELGRO
Analysts: Toh Yongrui/ Andrew Chow, CFA
What’s New : ComfortDelgro (CD), through its 51%-owned subsidiary, ComfortDelgro Cabcharge, will acquire Deane’s Bus Lines Pty Ltd and Transborder Express, both of which are part of Deane’s Transit Group (DTG).
DTG is one of the largest privately owned regional bus operations in New South Wales, Australia, with a fleet of 97 buses.
The total consideration for the acquisitions is A$53m (c. S$69.2m), representing approximately 6.8x EBITDA, and will be financed by internal funds.
Our View: We view this acquisition as a positive. CD has an enviable track record of acquisitions and operations in Australia.
Since entering Australia in 2005, its bus operations in Australia have grown and now account for 13.1% of group’s revenues and 20.9% of its operating profit.
CD’s recent share price performance has been very strong, rising 18.7% ytd. We maintain a BUY and will revisit our target price of S$1.75, pending more information on the acquisition from the management.
It remains our preferred pick in the land transport sector for its diversification of operations and cheaper valuations on a PE and P/B basis. CD is currently trading at 14.5x 2013F PE and 1.6x PB.
