SG: MARKET PULSE: ECS (19 Nov 2013)

Stock Name: ECS
Company Name: ECS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.585

MARKET PULSE: ECS

19 Nov 2013

KEY IDEA ECS Holdings: Challenging environment, but growth achieved ECS Holdings (ECS) reported a 4.5% YoY increase in its 3Q13 PATMI to S$8.7m on the back of a 11.4% jump in revenue to S$999.3m. After adjusting for forex and other exceptional items, we estimate that core earnings would have increased 4.7% YoY from S$8.7m to S$9.1m. This was in-line with our expectations. Looking ahead, we expect ECS to benefit from new product launches by major IT vendors in which it has established a strong working relationship with, such as Apple and Lenovo. We finetune our assumptions and raise our fair value estimate from S$0.56 to S$0.585 as we roll forward our valuations to 6x FY14F EPS. Maintain BUY, as valuations remain undemanding, with the stock trading at FY14F P/NTA of 0.55x and PER of 5.6x. (Wong Teck Ching Andy)

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