For ratings definitions and other important disclosure, refer to the Disclosure Section at the end of this report. May 3, 2012 Company Report BUY Price Target:HK$ 3.2 Upside:+82% Price(HK$) 1.76 Shares Outstanding 575 Market Cap. (HK$ m) 3,604 Free float (%) 27.6 52 Week Range 1.44/ 2.9 Controlling Shareholder TSMT (72.4%) BVPS(USD) 0.17 Debt ratio (%) 61.1 Related Research: 《Regent Manner:Top player in SMT》 March 16, 2012 《Regent Manner:Specialized in SMT with multiple growth drivers》 April 15, 2011 《Electronics Sector: Growth Opportunities in Accelerating Industry Upgrade》 March 11, 2011 Investment Highlights: 1Q12 result. Revenue grew by 20% to USD 389m, +17% QoQ. Gross margin dropped to 6.9% from 9.1% in 1Q11(11Q4: 6.8%) thanks to surging wages and R&D expenses. Net profit dropped 17.8% to USD 16.3m. Recovery in downstream panel industry driving shipment growth in LCD control board. Panel prices increased by 1-2% in late April across all major applications (monitor, laptop and TV). Panel makers like AU Optronics and CMI, which are the major customers of RMIH’ s control board, are increaseing capacity utilization. The new iPad (& possibly iPad Mini) and lower cost direct-type LED TV are catalysts for LED light bar growth . 1.)Sharp started shipping the new iPad panel in 2Q 2.) Apple might launch iPad Mini in 2H, which might drive the related supply chain 3Q shipments 3.)lower-cost direct type LED TV started to gain popularity. Increasing LED-TV penetration might further promote the growth of LED light bar business. White appliance and LED lighting sectors are new the value drivers. We expect new subsidy policy for energy saving would launch in this summer that might boost DC-inverter products volume supplied to Haier. RMIH is producing LED ballast for Philips and plans to work on LED light bulbs assembly. LED lighting is expected to account for 5-15% FY12 revenue and RMIH expects to earn 30-50% of Philips market share. We maintain our BUY rating with target price of HK$ 3.2. We expect ~10% and ~20% QoQ growth in 2Q and 3Q respectively, implying annual revenue growth target of 20-30%. Current share price is trading at FY12 P/E of 4.4x, which is a deep discount compared to its parent co. TSMT(6278.TT)’ s valuation (P/E of 8.7x). Financial Summary Year to Dec 2010A 2011A 2012E 2013E 2014E Turnover (USD m) 1,143 1,477 1,846 2,338 2,970 Turnover Growth (%) 69.5 29.2 25.0 26.7 27.0 Net Profit (USD m) 79 85 108 139 179 Net Profit Growth (%) 49.9 7.9 27.2 28.6 28.8 EPS (USD) 0.039 0.042 0.052 0.067 0.086 CFO per share(USD) 0.045 0.055 0.069 0.096 0.106 P/E (x) 5.8 5.4 4.4 3.4 2.6 P/B (x) 1.6 1.33 0.92 0.92 0.77 DPS(HKD) 0.17 0.14 0.18 0.23 0.29 Regent Manner(1997.HK) Bouncing back from Trough Key Data Price Performance Chart Technology & Telecom Analyst:Bill Fan, CPA SFC CE No.: AUT752 00852-28998331 [email protected]
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For ratings definitions and other important disclosure, refer to the Disclosure Section at the end of this report.
May 3, 2012
Company Report
BUY
Price Target:HK$ 3.2
Upside:+82%
Price(HK$) 1.76
Shares Outstanding 575
Market Cap. (HK$ m) 3,604
Free float (%) 27.6
52 Week Range 1.44/ 2.9
Controlling Shareholder TSMT (72.4%)
BVPS(USD) 0.17
Debt ratio (%) 61.1
Related Research:
《Regent Manner:Top player in SMT》
March 16, 2012
《Regent Manner:Specialized in SMT with
multiple growth drivers》
April 15, 2011
《Electronics Sector:Growth Opportunities in
Accelerating Industry Upgrade》
March 11, 2011
Investment Highlights:
1Q12 result. Revenue grew by 20% to USD 389m, +17% QoQ. Gross
margin dropped to 6.9% from 9.1% in 1Q11(11Q4: 6.8%) thanks to
surging wages and R&D expenses. Net profit dropped 17.8% to USD
16.3m.
Recovery in downstream panel industry driving shipment growth in
LCD control board. Panel prices increased by 1-2% in late April across
all major applications (monitor, laptop and TV). Panel makers like AU
Optronics and CMI, which are the major customers of RMIH’s control
board, are increaseing capacity utilization.
The new iPad (& possibly iPad Mini) and lower cost direct-type LED
TV are catalysts for LED light bar growth . 1.)Sharp started shipping
the new iPad panel in 2Q 2.) Apple might launch iPad Mini in 2H, which
might drive the related supply chain 3Q shipments 3.)lower-cost direct
type LED TV started to gain popularity. Increasing LED-TV penetration
might further promote the growth of LED light bar business.
White appliance and LED lighting sectors are new the value drivers.
We expect new subsidy policy for energy saving would launch in this
summer that might boost DC-inverter products volume supplied to Haier.
RMIH is producing LED ballast for Philips and plans to work on LED
light bulbs assembly. LED lighting is expected to account for 5-15%
FY12 revenue and RMIH expects to earn 30-50% of Philips market
share.
We maintain our BUY rating with target price of HK$ 3.2. We expect
~10% and ~20% QoQ growth in 2Q and 3Q respectively, implying
annual revenue growth target of 20-30%. Current share price is trading at
FY12 P/E of 4.4x, which is a deep discount compared to its parent co.