Journey to Wealth
ECS ICT - No surprises
Period 1H12
Actual vs. Expectations
1H12 net profit of RM13.7m accounted for 40.8% of ours and the street's full year estimate. We consider this to be within expectations as we expect a stronger 2H due mainly to more products launching and seasonality factor.
Dividends No dividend was announced during the quarter.
Key Result Highlights
1H12 net profit rose 9% to RM13.7m, due mainly to improved sales coupled with higher interest income of RM0.72m (from RM0.13m previously). 1H12 revenue rose 4% to RM614.6m, thanks to higher performance from all its three business segments, namely ICT distribution (+5%), Enterprise systems (+1%) and IT services (+19%).
The higher sales in its ICT distribution segment were mainly driven by encouraging sales from tablet PC and more retailers stocking up for PC Fairs during March. Enterprise systems and IT services on the other hand were mainly boosted by higher sales of networking products, enterprise software and completion of a few project transactions.
QoQ, despite 2Q12 revenue inched up marginally by 1%, net profit plunged 31% mainly attributed to lower sales from its higher margin Enterprise Systems segment (-12%, to RM91.9m) as a result of seasonality factor. As such, its PBT margin and net profit margin deteriorated by 1.3% and 0.8% respectively.
Outlook Remains bright, underpinned by robust IT spending and encouraging market trends.
The lower consumer demand for Notebook PCs has mitigated by the increasing popularity of Tablet PCs and Ultrabook PCs. Recently, the group has started to distribute the Eclipse 4G smartphone to its IT channel retailers. We believe this will provide additional revenue stream to the group in future.
Change to Forecasts
No changes in our FY12-13E net profit of RM33.5m - RM35.6m, respectively.
Rating MAINTAIN OUTPERFORM
Valuation Maintaining our ECS TP at RM1.70, based on an unchanged targeted FY12 PER of 6.1x (+2SD).
Risks Lack of or delay in new ICT products.
Slower growth in Malaysia's internet penetration rate.
Source: Kenanga
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
28.40%More articles on Journey to Wealth
Ekovest: No plan to launch another offer for Iskandar Waterfront City
Created by kiasutrader | Mar 29, 2018
Kenanga Research - On our Portfolio - Parliament dissolution around the corner?
Created by kiasutrader | Mar 25, 2013
Plantation Sector - Proposed accounting standard scrapped OVERWEIGHT
Created by kiasutrader | Mar 25, 2013
Pavilion Reit - Limited upside, earnings upside have been priced in HOLD
Created by kiasutrader | Mar 25, 2013
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
Latest Videos
Apps
Top Articles
1
2
Koon Yew Yin's Blog
CPO price is rising rapidly as shown by chart below - Koon Yew Yin
3
5
save malaysia!
Visa-free travel to China extended for Malaysians to 30 days
6
7
8
BFM Podcast
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
