Re:market correction... by MacGyver30th, Jul. 04:11 PM Market is bullish again.. Good trading period from now to early-m...
Re:Map Technology - ... by happin30th, Jul. 03:16 PM MAP is now at 6 cents. Noticed that yesterday's last trade was 1...
Re:Rokko-An Explosiv... by neontet30th, Jul. 07:41 AM all these semicon companies are doing really well.
congrats on s...
market correction by pathfinder30th, Jul. 12:10 AM With all US company result good news ending in 2 weeks time & no ...
Re:Rokko-An Explosiv... by MOSBY29th, Jul. 11:49 PM http://www.remisiers.org/research//dailyex2307.pdf
TP :$0.30...
DESIGN STUDIO, BROADWAY: What analysts now say....
Friday, 26 February 2010
Excerpts from latest analyst' reports ....
DESIGN STUDIO 'set to become a multi-bagger' - Kim Eng Research analyst Pauline Lee
Source: Kim Eng Research, Feb 25
DESIGN STUDIO reported a record net profit of $25.4m despite the recession last year. The group proposed a final dividend of 1.25 cts per share, substantially higher than FY08. We expect the strong earnings to prevail in FY10, supported by its fast-growing order book. Design Studio generates strong cash flow and sits on a net cash of $35.7m (14 cts/share). The stock is a great bargain at 4x PER. Positive catalysts includes M&A and mega contract wins at DDS.
Design Studio is completing its contract on Marina Bay Sands Integrated Resort.
Record profits against the economic downturn
Design Studio achieved a record net profit of $25.4m in FY09 (+98% yoy), led by contributions from its JV associate DDS, growth across all business segments, and effective cost controls.
Its net profit was slightly below our expectations, due to a time lag in contract recognition at the Marina Bay Sands (MBS). The group proposed a final dividend of 1.25 cents per share, bringing the full-year DPS to 2.5 cents, substantially higher than the DPS of 1 cent in FY08.
Strong earnings momentum into 2010
The delay in contract recognition of DDS bodes well for FY10 earnings. Earnings visibility in FY10 is further supported by Design Studio’s order book of $164m. DDS, which could tap on mega contracts in the hospitality and commercial segments in Southeast Asia, remains a wildcard that will boost earnings upside.
Order book is filling up fast
At the same time, earnings sustainability was strong as the group continues to secure new orders for FY11 and beyond. New projects secured include Viva, Meadows on Pierce, 38 Martin Road, Yishun Parcel 52, The Beacon Heights and Aura Park. With economies in Asia improving, the group remains optimistic on its prospects.
An appealing M&A target
As Design Studio’s earnings approach the $50m-mark in the next 3-5 years, the stock is on track to become a multi-bagger. Its attractive valuation at just 3.8x ex-cash PER, coupled with strong cash position with zero bank borrowings, makes Design Studio a desirable M&A target. We are keeping our target price of $1, pegged to 7.5x FY10 PER.
• FY09 slightly exceeds our expectation but 10% above consensus on strong margin • Up FY09 DPS to 3 S cts, expect payout to sustain • Reiterate Buy with 50% upside to TP S$1.28, pegged to undemanding 7x FY10 PE
4Q09 profits way ahead of sales growth. 4Q09 revenue rose 9% yoy to S$125m but net profit more than doubled as cost control, a richer mix and improved non-HDD allowed Broadway to expand EBIT margin to 8.6% from 4.7% in 4Q08. Overall, FY09 earnings beat expectations, with net profit of S$31.8m up 42% y-o-y despite a 9% drop inrevenue. Net gearing dropped to 0.26x from 0.57x at end-FY08.
Topline growth plus steady margin in FY10. HDD components should lead growth as major HDD customers are expected to increase shipment by ~20%. Packaging sales would also normalize to 20% growth as consumer electronics demand recovers. More importantly, non-HDD component (largely semicon equipment) is expected to reverse S$14m losses in FY09 as semicon recovery accelerates and as Broadway makes further headway into the auto segment.
Strong CFs should sustain higher DPS. Broadway raised full year DPS to S$0.03 from S$0.02.This represents 20% dividend payout, which is sustainable since Broadway had been generating positive FCF in the last two years and S$40 capex in FY10F is not excessive.
This market leader is deeply undervalued. Broadway remains undervalued at only 4.5x FY10 P/E and 0.7x P/BV.We reiterate our BUY rating on the stock, which now offers 50% upside to our TP of s$1.28 plus a moderate dividend yield of 3.6% at the current price.
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