Hi-P jumps 13% in two days after DBS ups target price
Hi-P’s stock price has surged 13% to close at 99 cents after the leading integrated contract manufacturer issued its 3rd profit upgrade in three months on Tuesday.
On the same day, DBS analyst Tan Ai Teng reiterated her “Buy” call and upgraded her target price to S$1.26.
Her new target price is based on 11x PE and leaves room for upside of 27% based on yesterday’s close price.
Ms Tan raised her FY2010 earnings forecast by 11% and FY2011 by 10% after the management expressed confidence of sustained orders driven by demand for new programmes in smartphones and new PC tablets.
Smartphone demand will be driven by higher volume from bellwethers RIM and Apple, while shipment of PC tablets is likely to surprise on the upside when touch panel constraint starts to ease, according to the analyst.
Potential privatization plays, according to Kim Eng
Following niche developer Soilbuild’s announcement of a privatization offer at $0.80 a share in cash, Kim Eng has identified a list of potential privatization candidates based on the following criteria:
(1) High net cash as a percentage of market capitalization
(2) Low price-to-book ratio
Other reasons commonly cited for delisting include low trading liquidity of the shares, related compliance costs of listed status and greater management flexibility.
