Stock Name: ECS
Company Name: ECS HOLDINGS LIMITED
OCBC Investment Research in a Sept 12 research report says: "We believe that ECS Holdings' (ECS) key focus would be to manage its working capital over the next two quarters, which could mean softer top-line growth.
"Recall that its net gearing ratio had jumped up to 86.5% in 2Q11, beyond management's target of maintaining it below the 70% mark. This is further exacerbated by an increase in the group's cost of debt due largely to higher borrowing rates in China. Nevertheless, management recently updated us that the working capital situation of the group has since improved.
"For now we maintain our estimates with an unchanged fair value estimate of $1.04 (based on 7x blended FY11/FY12F core EPS). ECS is trading at 3.3x FY12F PER, below its average forward PER of 3.5x during the 2008-2009 global recession. MAINTAIN BUY."
Company Name: ECS HOLDINGS LIMITED
| Research House: OCBC | Price Call: BUY | Target Price: 1.04 |
OCBC Investment Research in a Sept 12 research report says: "We believe that ECS Holdings' (ECS) key focus would be to manage its working capital over the next two quarters, which could mean softer top-line growth.
"Recall that its net gearing ratio had jumped up to 86.5% in 2Q11, beyond management's target of maintaining it below the 70% mark. This is further exacerbated by an increase in the group's cost of debt due largely to higher borrowing rates in China. Nevertheless, management recently updated us that the working capital situation of the group has since improved.
"For now we maintain our estimates with an unchanged fair value estimate of $1.04 (based on 7x blended FY11/FY12F core EPS). ECS is trading at 3.3x FY12F PER, below its average forward PER of 3.5x during the 2008-2009 global recession. MAINTAIN BUY."
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