TREK 2000: Wins US$50 m contract from Rely/Mattel

RHB Research analyst: Jarick Seet (left)

Trek 2000 (TREK SP) announced that it has secured USD50m worth of contract from Rely/Mattel, the US toymaker to supply proprietary Wi-Fi memory modules for smart devices.

This contract is double what it has previously won in 2014 from its same customer Rely/Mattel, signaling a strong vote of confidence for Trek's wireless flucard. 

We expected USD100m worth of sales from its wireless flucard this year, with 50% already filled by this contract win. 

We expect another USD50m worth of orders to be easily won by the end of FY15. 

All in all, we expect its FY15 NPAT growth to surge 261.3% to USD9.2m, coupled with a number of exciting new projects lined up, we remain bullish on Trek’s outlook and expect it to continue trekking ahead in FY15. 

Maintain BUY with a SGD0.61 TP, pegged to a 16x FY15 P/E, which results in a 73% upside from current levels.  

Previous report here.