Serial managed to still grow its top line in FY11

Stock Name: Serial
Company Name: SERIAL SYSTEM LTD

Research House: CIMB

Price Call: BUY

Target Price: 0.147

Serial System (SERL SP; S$0.147 - BUY)- Serial managed to still grow its top line in FY11 despite a tough 2H11.Dividend yields of between 5.8-7.8% also makes Serial an interesting buy.


Source: CIMB 24 February 2012

Serial System rated 'increase exposure' by SIAS

Stock Name: Serial
Company Name: SERIAL SYSTEM LTD

Research House: SIAS

Price Call: BUY

Target Price: 0.172

SIAS Research in a Nov 7 research report says: "Serial made three proposed acquisitions over the last three weeks.

"The three acquisitions, costing a total of $5.6 million, will allow Serial to (a) penetrate the Korean automotive industry and "small manufacturer market", (b) acquire two major branded Taiwan manufacturing customers and (c) take over a ready customer base in Korea to distribute the National Semiconductor brand of products.

"Serial reported a 2.3% y-o-y decline in revenue for 3Q FY11 - from $195.0 million in 3Q FY10 to $190.4 million in 3Q FY11. We adjusted our revenue and PATMI forecasts for FY2011 to $770.0 million and $13.1 million respectively and reduced our intrinsic value to 17.2 cents per share.MAINTAIN INCREASE EXPOSURE."

SIN: CIMB TraderAM - Dukang Distillers

Stock Name: Serial
Company Name: SERIAL SYSTEM LTD

Research House: CIMB

Price Call: BUY

Target Price: 0.24

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.98

Stock Name: ST Engg
Company Name: SINGAPORE TECH ENGINEERING LTD

Research House: CIMB

Price Call: BUY

Target Price: 3.88

14 June 2011 / Singapore

Trades of the Day...

Fundamentally:

Dukang Distillers Holdings Ltd (DKNG SP; S$0.56) - We visited Dukang's plant in China last week. We like Dukang for its (i) strategic initiatives (ii) strong industry traction (iii) attractive valuation with a lower CY11 P/E of 19.1x relative to its peer average of 23.4x (iv) strong net cash position of RMB587.7m. Growth catalyst to stem from the (i) introduction of new products (ii) penetration into new geographic regions (iii) development of the Dukang village which will increase the visibility of its brand (iv) optimization of utilization rate at the Dukang plant.

What's Relevant...

Singapore shares closed weaker on Monday with the blue-chip STI down 19.3pts (0.6%) to 3,059. Decliners outnumbered advancers 4 to 1 in a volume of 1bn shares worth $1.2bn. Following S&P's downgrade of Greece by three notches and warned of a potential default, we expect the STI to fall at open. We would avoid O&M counters like Keppel Corp and SembMarine this morning after US energy plays faltered in overnight trade after a drop in oil prices.

Corporate News...

Low Keng Huat. 1Q11's net profit of S$21.6m was up 14% yoy, despite a 56% yoy decline in revenue to S$40m. Construction revenue fell 64% to S$27m after the completion of NEX at Serangoon central mall, while turnover for hotel & F&B businesses decreased 5.5% to S$12m. Serial System announced that its 91% owned Hong Kong subsidiary, Serial Microelectronics (HK) has been appointed as a distributor for Greater China and Taiwan by Fingerprint Cards AB (FPC). Serial is FPC's 2nd distributor appointed for the Greater China and Taiwan market. We have a BUY call on the stock with a TP of S$0.24. Q&M Dental has entered into another joint venture arrangement with a new Chinese partner. It signed a non-binding memorandum of understanding with the shareholders of Beijing Le Le Jia Medical Solutions (LLJ) where LLJ shareholders shall transfer 49% of their shares to Q&M China for RMB25m (S$4.8m). Maintain BUY, TP S$0.98. ST Engineering has received a letter of claim by lawyers of Louis Dreyfus Armateurs (LDA) in respect of shipbuilding contract for the Roll-on/Roll-off Passenger ferry contracted in Jul 07 for S$179m. LDA is claiming for both liquidated (S$4.8m) and unliquidated (approx Euro33m) damages from ST Marine's purported breach. ST Marine is taking legal advice on the claim which it intends to dispute. Maintain OUTPERFORM, TP S$3.88. Yongnam's contract wins had picked up strongly in 2Q11, with the group securing more than S$190m worth of contracts or 40% of our target for this year. Coupled with profit margins which had been sustained over the four quarters of 2010 (with a positive surprise in 1Q11), we believe YNH is on track to meet our FY11 earnings target. Maintain OUTPERFORM, TP S$0.40.