Bursa Malaysia Stock Watch
ECS should grow 9.1pc a year: MIMB
kltrader
Publish date: Fri, 10 Sep 2010, 02:08 PM
kltrader
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ECS ICT Bhd should continue to grow 9.1 per cent annually in line with the industry projection between 2009 and 2013 due an increase in personal computer and notebooks ownership, as well as higher internet broadband penetration, says MIMB Investment Bank.
ECS is an ICT and products distributor.
'We expect the market share of ECS to increase as weaker and small players are eventually diminished. Hence, our projected revenue growth rate of 13 per cent seems achievable,' it said in a research note here today.
Based on the earnings forecast, MIMB Investment believes the group should be able to pay a full year gross dividend per share of nine sen, or 6.7 sen net of tax, translating into a gross and net yield of 7.9 per cent and 5.9 per cent respectively.
ECS has reaffirmed its dividend policy of a 30 per cent payout on net profit from financial year 2010 onwards. Thus far, it has declared a four sen interim dividend for its financial year.
MIMB Investment has maintained its 'trading buy' call on ECS.
The company's revenue for the first half of this year was RM626.2 million while net profit was at RM13.5 million, very much in line with MIMB Investment''s earnings projections.
Its net profit increased more than 30 per cent on a year-on-year basis on the back of a decent revenue growth of approximately six per cent, as well as expansion in net profit margin that expanded to 2.5 per cent from two per cent in second quarter last year.
MIMB Investment said ECS is well positioned to take market share from smaller players as it has a strong distribution network and a supply of a wide range of products. -- Bernama
ECS is an ICT and products distributor.
'We expect the market share of ECS to increase as weaker and small players are eventually diminished. Hence, our projected revenue growth rate of 13 per cent seems achievable,' it said in a research note here today.
Based on the earnings forecast, MIMB Investment believes the group should be able to pay a full year gross dividend per share of nine sen, or 6.7 sen net of tax, translating into a gross and net yield of 7.9 per cent and 5.9 per cent respectively.
ECS has reaffirmed its dividend policy of a 30 per cent payout on net profit from financial year 2010 onwards. Thus far, it has declared a four sen interim dividend for its financial year.
MIMB Investment has maintained its 'trading buy' call on ECS.
The company's revenue for the first half of this year was RM626.2 million while net profit was at RM13.5 million, very much in line with MIMB Investment''s earnings projections.
Its net profit increased more than 30 per cent on a year-on-year basis on the back of a decent revenue growth of approximately six per cent, as well as expansion in net profit margin that expanded to 2.5 per cent from two per cent in second quarter last year.
MIMB Investment said ECS is well positioned to take market share from smaller players as it has a strong distribution network and a supply of a wide range of products. -- Bernama
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