|Bid||1.4200 x 0|
|Ask||1.4300 x 0|
|Day's range||1.4100 - 1.4400|
|52-week range||0.7300 - 1.8100|
|Beta (3Y monthly)||1.82|
|PE ratio (TTM)||11.35|
|Forward dividend & yield||0.05 (4.27%)|
|1y target est||0.82|
Year 2019 did not kick off with a good start. Spooked by China’s Manufacturing Purchasing Managers’ Index (PMI) falling to 49.4 hinting signs of contraction, the Straits Times Index (STI) closed 1.1 percent in the red on 2 January 2019 at 3,038.89. Superstitious investors believe that the result of the first trading day is a […]
Gone were the days when leading integrated contract manufacturer Hi-P International (Hi-P) was trading at the region above $2.50 a share during the first quarter of this year. Within a short time span of slightly more than six months, the share price of this tooling specialist has tumbled by more than 72.1 percent from an all-time high of $2.72 to $0.76 as at 29 October 2018. In line with the heightening negative sentiments around this counter, we point out three red flags with regard to Hi-P’s financials which could be precursors to the group’s deteriorating performances amidst challenging operating environment.
Hi-P International (HIP) lowered its earnings guidance for the second time this year expecting lower sales and profit in 3Q18. The guidance cut is due to a delay in billing for certain production tools, lower yields for products undergoing ramp-up as well as lower market demand for certain products. The latter two reasons may be a double-whammy that further accelerates a decline in HIP’s profitability, whose margins are already under pressure given its large fixed cost base amidst an environment of intense pricing competition.
Frasers Logistics & Industrial Trust’s 3Q18 results came in within our expectations with gross revenue and NPI rising 22.6% and 21.7% respectively. This was driven largely by contribution from acquisitions in Australia, annual fixed rental increment in the group’s Australia portfolio as well as incremental NPI from its Europe portfolio acquired in May-18. As a result, DPU improved 3.2% to $0.0541. Overall portfolio metrics remained healthy with high occupancy at 99.3% and only 0.1% and 3.4% of its leases expiring for 4Q18 and FY19, while aggregate leverage stood at 36.3% following the completion of Europe portfolio acquisition. Although there has been an increase in industrial supply in Sydney and Melbourne, demand continues to be strong which can be seen from the 4.6% growth in prime grade net face rents for Sydney in 2Q18. For Melbourne, prime grade net face rents grew 1.1%. Maintain BUY. OCBC Investment (3 Aug)
Since our previous coverage in July 2017, Hi-P International's (Hi-P) share price has increased by over 40 percent to $1.30 at the time of writing. Although the current price is a steep drop from its 52-week high of $2.72 recorded in March 2018, investors who picked up their shares at below a dollar each in July last year should be more than satisfied as Hi-P also announced dividends of $0.19, $0.02 and $0.04 in August 2017, November 2017 and May 2018 respectively.