Stock Name: WorldPreci
Company Name: WORLD PRECISION MACHINERY LTD
DBS Vickers Securities in a Feb 28 research report says: "Excluding write-offs and forex gain, core earnings of RMB40 million beat our forecast of RMB35 million. This was despite lower than expected sales of RMB238.2 million (-24% y-o-y).
"Gross margin for the quarter was impressive, surging to 33.6% from 25.8% in 4Q10 and 28.4% in 3Q11. Net gearing rose to 0.26x, mainly due to loans used to fund the new plant in Shenyang. Although orderbook of RMB200 million is slightly below average, more contract win is likely as World continues to benefit from PRC's industrialisation, booming auto parts and home appliance markets.
"On balance, we project 20-30% earnings growth although management guides weaker 1Q12 y-o-y considering an exceptionally strong 1Q11. Maintain earnings estimates and target price of 68 cents (peg to mean PE). MAINTAIN BUY."
Company Name: WORLD PRECISION MACHINERY LTD
| Research House: DBS Vickers | Price Call: BUY | Target Price: 0.68 |
DBS Vickers Securities in a Feb 28 research report says: "Excluding write-offs and forex gain, core earnings of RMB40 million beat our forecast of RMB35 million. This was despite lower than expected sales of RMB238.2 million (-24% y-o-y).
"Gross margin for the quarter was impressive, surging to 33.6% from 25.8% in 4Q10 and 28.4% in 3Q11. Net gearing rose to 0.26x, mainly due to loans used to fund the new plant in Shenyang. Although orderbook of RMB200 million is slightly below average, more contract win is likely as World continues to benefit from PRC's industrialisation, booming auto parts and home appliance markets.
"On balance, we project 20-30% earnings growth although management guides weaker 1Q12 y-o-y considering an exceptionally strong 1Q11. Maintain earnings estimates and target price of 68 cents (peg to mean PE). MAINTAIN BUY."
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