Actual vs. Expectations The group’s full-year net profit was
better than ours as well as the consensus estimate and accounted for 113.7% and
110.2% of both numbers respectively.
Dividends A
final tax-exempt dividend of 2.0 sen has been proposed, bringing FY12 net DPS
to 3.0 sen, which implies a payout ratio of 16.1%.
Key Result Highlights YoY, FY12 revenue soared by 30.4%,
boosted by the higher orders in the last two quarters amid the Thai’s flood
recovery. However, its net profit merely inched up by 3.7%, offset by the
property damage losses made in the 1Q12 during the Thai’s flooding.
QoQ, 4Q12 revenue declined by 7.5% despite the normalised
shipment of orders above as there were lower shipment of orders of late with a
slowdown in sales being anticipated for the next two quarters. Nonetheless, the
net profit was only reduced by 5.8% thanks to a lower effective tax rate of
13.9% (3Q12: 17.4%). The camera parts segment accounted for 57% of the group’s
total turnover (3Q12: 49%) followed by HDD (29% vs. 38%) and
Industrial/Automotive (14% vs. 13%).
Outlook Management believes that the growth in the
camera segment going forward may continue to be dragged down by a softer demand
due to 1) a weaker consumer spending; 2) the anti-Japanese sentiments in China
and 3) a lacklustre traditional year-end spending due to the lack of demand.
The group expects a turnaround to only happen in 2HFY13 for
the HDD sector as the industry is in the midst of a down-cycle after a
short-lived post-flood recovery.
Change to Forecasts We are maintaining our earnings forecasts pending
more details from today’s results briefing.
Rating Maintain OUTPERFORM
Valuation We are maintaining our TP for now. Our
current TP of RM1.50 is based on targeted FY13 PER of 7.5x.
Risks Foreign currency exchange rate.
Industry recovery may falter halfway
Lower orders from HDD customers
Source: Kenanga
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