Excerpts from analysts' report

RHB Research analysts: Jarick Seet (left) & Terence Wong, CFA JarickSeet11.14

IPS officially commenced HS-Micro security products co-manufacturing in Singapore, with its main role to source for locally-produced encasing and/or shields, and product assembly.

Maintain BUY with a SGD0.63 TP (31% upside). It also commenced a pilot trial run on the secure virtual health care system and solutions JV at the Kembangan-Chai Chee Seniors Activity Centre. We remain bullish on IPS’ bright outlook.

Commencement of co-manufacturing. As of 1 Apr, IPS Securex (IPS) officially commenced the co-manufacturing of HS-Micro security products in Singapore. Its main role is to source for locally-produced encasing and/or shields, and product assembly.

We expect the scale for co-manufacturing should remain relatively small this year and much bigger next year. It is only expected to have a material impact on the earnings per share and net asset value per share of the group next year.

Trial run for secured virtual healthcare systems and solutions (SVHSS). The SVHSS, a joint-venture (JV) between IPS and Mr Thomas Goh Khoon Lim, recently commenced a trial run at the Kembangan-Chai Chee Seniors Activity Centre for a 6-month period beginning 26 Mar.

The SHVSS enables real-time communication via video conferencing between the centre’s volunteers and the elderly at home who require emergency assistance. In addition, the SVHSS can be equipped with optional capabilities, such as the integration of third-party devices for health monitoring, personnel tracking and many other customisable features, which are beneficial for the healthcare of senior citizens.

Stock price 

48 cents

52-week range

13.25 – 54 cents

PE (ttm)


Estimated P/E (6/2015)


Market cap

S$77.8 m



Dividend yield
Bloomberg data


Maintain BUY with a SGD0.63 TP (post share split). With IPS still expanding its range of products rapidly and going into co-manufacturing, we remain very bullish on this counter due to its unique position in the South-East Asia space.

We continue to expect stellar results ahead as it continues to establish a stable foothold in the homeland security business.

In addition, we are optimistic about more potential contract wins as well on sales of PepperBall Technologies-related products to neighbouring governments, which could bring IPS’ earnings to a whole new level. Maintain BUY with a TP of SGD0.63 (8x FY16F P/E).

♦ A key risk would be if PepperBall contract wins fall below our expectations, which would dent our earnings estimates.

Full report here. 

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