Stock Name: Broadway
Company Name: BROADWAY INDUSTRIAL GROUP LTD
Research House: CIMB
CIMB in an Apr 25 research report says: "Excluding forex gains of $3.5 million, core net earnings of $5.6 million were about 40% below consensus and our forecasts on lower-than-expected sales and gross profit margins. Reported 1Q11 profit forms 23% of consensus and our forecasts.
"Sales slipped 9% y-o-y and 12% q-o-q to $138 million. EBITDA margins contracted 3.7% pts y-o-y to 10.4%. Net gearing remained steady at 0.09x, similar to a quarter ago. Broadway's new plant in Chongqing is on schedule for a gradual relocation of its back-end assembly processes in the HDD component business from Shenzhen in 2H11.
"We cut our FY2011-2013 estimates by 5-12% after lowering margin assumptions. Accordingly, our target price drops from $1.23 to $1.21, still based on 1x CY11 P/BV - a level we deem fair given the uncertain near-term outlook. MAINTAIN NEUTRAL."
Company Name: BROADWAY INDUSTRIAL GROUP LTD
Research House: CIMB
CIMB in an Apr 25 research report says: "Excluding forex gains of $3.5 million, core net earnings of $5.6 million were about 40% below consensus and our forecasts on lower-than-expected sales and gross profit margins. Reported 1Q11 profit forms 23% of consensus and our forecasts.
"Sales slipped 9% y-o-y and 12% q-o-q to $138 million. EBITDA margins contracted 3.7% pts y-o-y to 10.4%. Net gearing remained steady at 0.09x, similar to a quarter ago. Broadway's new plant in Chongqing is on schedule for a gradual relocation of its back-end assembly processes in the HDD component business from Shenzhen in 2H11.
"We cut our FY2011-2013 estimates by 5-12% after lowering margin assumptions. Accordingly, our target price drops from $1.23 to $1.21, still based on 1x CY11 P/BV - a level we deem fair given the uncertain near-term outlook. MAINTAIN NEUTRAL."
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