Excerpts from latest analyst reports...

Kim Eng highlights Techcomp's low valuation vis-a-vis peers

Analyst: Yeak Chee Keong

Richard Lo, President of Techcomp.
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Techcomp’s net profit this year would be affected by a one-off expense related to its dual listing. In addition, administrative expenses were comparatively higher following increased business activities and the acquisition of Precisa in 1Q10.

Its second-half is seasonally stronger, but with net profit of only US$0.5m in 1H11, it would need a very strong 2H11 just to match its FY10 performance.

Can dual listing lift valuation? In general, the valuation on the SEHK is higher than that on the SGX.

Techcomp hopes to achieve a higher valuation for its shareholders through such a listing. Its peers are trading at trailing PERs of 13-27x on various exchanges, while it currently trades at FY10 PER of 6.9x.

Given that this is a listing by way of introduction, no new shares would be issued and liquidity could be a concern. Therefore, it remains to be seen how Techcomp would perform when it starts to trade on 21 December 2011.

Recent story: TECHCOMP to dual-list in HK in Dec, LIAN BENG's orderbook is $859 m


CIMB says buy Goodpack stock as Xmas gift

Analysts: Kenneth Ng CFA, Daniel Lau

David Lam, chairman of Goodpack.
NextInsight file photo

We upgrade Goodpack from Neutral to Outperform. Current valuations are unjustified, in our view, as Goodpack’s fundamentals remain sound.

Its market share and margins should continue to expand. Our unchanged target price ($1.50) is based on average trough valuations of 11x CY13 EPS.

Sweet valuations: Precipitated by French investor Amundi’s decision to trim its stake below 5%, the stock has shed 13.5% since 28 Nov, to underperform the index by 14%.

It is now trading at 9.6x CY13 P/E, 1 standard deviation below its 10-year historical average.

We believe this is unjustified, considering its firm fundamentals. This is an opportune time to pick up an early Christmas gift.

Related story: GOODPACK: The man behind its sterling results

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