Hi-P cut to 'sell', target slashed 40% to 43 cents by RHB

Stock Name: Hi-P
Company Name: HI-P INTERNATIONAL LIMITED

Research House: RHB

Price Call: SELL

Target Price: 0.43

SINGAPORE (May 11): RHB Securities Singapore has downgraded Hi-P International to "sell" from "neutral" and slashed its price target to 43 cents from 72 cents, citing a "gloomy" outlook for the contract manufacturer.

The revised target is based on 0.6 times FY2015 book value.

RHB also lowered its FY2015 earnings estimate for Hi-P by 54%.

"We understand that the Xiaomi project turned out to be unsuccessful, with prices slashed, cutting margins drastically despite reaching its targeted production yields," RHB analysts Jarick Seet and Terence Wong wrote in a note.