AffinHwang Capital downgrades Unisem to Sell, target price RM1.54

KUALA LUMPUR (Dec 16): AffinHwang Capital Research has downgraded Unisem (M) Bhd to “Sell” (from Reduce) at RM1.83 with an unchanged target price of RM1.54 and said Unisem's stock price has continued to gain positive traction on accumulation by a major shareholder.

In a note Tuesday, the research house said this could be attributed to: 1) its strong 3Q14 results and the possibility of strong earnings delivery in the subsequent quarters; 2) its exposure to the robust RF business; and 3) the potential for a strong DPS in 4Q14.

“However, trading at 17.3x 2015 EPS, and a premium to peers, we believe that good news is already in the price. On a risk adjusted basis, Unisem is the most expensive semiconductor stock under our coverage.
“With good news priced in and limited re-rating catalyst from this point, we turn anti-consensus on the stock, downgrading Unisem to Sell with an unchanged target price of RM1.54,” it said.

MIDF Research maintains Buy on Unisem, ups target price to RM1.70

KUALA LUMPUR (May 4): MIDF Research has maintained its Buy rating on UNISEM (M) BHD [] and raised its target price to RM1.70 (from RM1.60) and said the company’s management indicated that 2Q12 will likely post a sequential quarter revenue growth of +8%qoq to +10%qoq suggesting the end of low volume loading.

“Its customers have started to replenish inventory and there are strong demand for its wafer bumping, WLCSP, flip chip and QFN (which are for the smartphone and tablet market) services,” it said in a note Friday.

‘We are tweaking our FY12 and FY13 forecast upwards by +4.2% and +3.3% respectively as volume loading is expected to take off especially in 2H12.

“We maintain our BUY call with a revised target price of RM1.70 (from RM1.60), derived by pegging EPS12 to 13x PER which is one standard deviation higher than its 5-year historical average,” it said.



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Unisem shares fall on 1Q loss

KUALA LUMPUR (May 3): UNISEM (M) BHD [] shares retreated on Thursday after it posted net loss RM13.52 million for the first quarter ended March 31, 2012 compared with net profit RM5.09 million a year earlier.

At 9.28am, Unisem fell five sen to RM1.41 with 208,500 shares done.

It said on Wednesday that revenue for the quarter fell to RM256.61 million from RM291.97 million in 2011.

Unisem attributed the declines in its revenue and profit to reduced sales volume, a one-time retrenchment costs of RM5.7 million arising from a efficiency/redundancy exercise at PT Unisem and higher depreciation charges.

Loss per share was 2.01 sen compared to earnings per share of 0.75 sen previously.

Net assets per share was RM1.56.

On its outlook, Unisem said it expects its revenue and earnings in the second quarter to improve from that achieved in the first quarter and to continue to improve to the end of the financial year.



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CIMB Research maintains Trading Buy on Unisem, target price RM1.87

KUALA LUMPUR (May 3): CIMB Research has maintained its Trading Buy rating on UNISEM (M) BHD [] at RMq.46 with a target price of RM1.87 and said the company’s RM11 million 1Q12 loss arising from lower volumes and higher fixed costs was within expectations as 1Q is typically battered by seasonal weakness.

In a note May 3, the research house opined that Unisem’s earnings had bottomed and should recover strongly in the coming quarters.

“We continue to project RM59 million net profit for the full year. We reiterate our Trading Buy call given recently improving leading indicators.

“It is not an outperform yet as visibility is still lacking on the sustainability of this recovery. Our target price basis remains 1.25x FY13 P/BV, based on a 25% premium over its 5-year historical P/BV,” it said.



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Stocks to watch Unisem, Daya Materials, Opcom, Heitech Padu, Hock Lok Siew Corp

KUALA LUMPUR (May 2): The FBM KLCI could be hard pressed to sustain its gains on Thursday, as early trade in Europe and Wall Street on May 2 pointed to weaker performance at the equity markets as disappointing euro zone data sparked new concerns over the region's fiscal health ahead of domestic economic data.

Markit's Eurozone Manufacturing Purchasing Managers' Index dropped to 45.9 last month from 47.7 in March, marking its lowest reading since June 2009. European shares erased earlier gains and the euro dropped to its lowest level in two weeks against the Japanese yen., according to Reuters.

A slew of announcemnts on Bursa Malaysia, including that of the termination of the share swap deal between MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and AIRASIA BHD [] could spur investor activity, but whether the FBM KLCI can advance will be left to be seen.

Among the stocks that could be in focus are UNISEM (M) BHD [], DAYA MATERIALS BHD [], OPCOM HOLDINGS BHD [], HEITECH PADU BHD [] and Hock Lok Siew Corporation Bhd.

Unisem posted net loss RM13.52 million for the first quarter ended March 31, 2012 compared with net profit RM5.09 million a year earlier.

It said that revenue for the quarter fell to RM256.61 million from RM291.97 million in 2011.

Daya Materials Bhd’s unit Daya CMT Sdn Bhd has secured a CONSTRUCTION [] contract worth RM270 million from Yuk Tung Corporation Sdn Bhd.

Daya said that Daya CMT had been awarded the contract as the principal sub-contractor for the development comprising 3-Blocks of 28-Storey mixed development consisting soho units, office lots, podium car park and basement car park at Jalan Sungai Besi in Kuala Lumpur.

Opcom Holdings Bhd, a fibre-optic cable manufacturer, has secured an RM82 million variation order to an existing RM359 million contract with TELEKOM MALAYSIA BHD [].

Opcom said it had secured the RM359 million fiber-to-the-home contract from Telekom in April 2009. Opcom had in May 2011 secured a two-year extension for the project till April 19, 2013.

Heitech Padu Bhd secured a RM15.2 million job from the national registration department.

Hock Lok Siew Corp said on Wednesday that it had been designated a Practice Note 17 company after triggering the prescribed criterias of the Listing Rules.

Meanwhile, the RM1.1 billion share-swap deal involving beleaguered Malaysian Airline System Bhd (MAS) and AirAsia Bhd has been called off, according to filings to Bursa Malaysia Securities Bhd on Wednesday.

Shares in both MAS and AirAsia were suspended from trading on Wednesday ahead of the announcement, but the airlines have not announced when their respective securities would resume trading.

However, if MAS and AirAsia resume trade on Thursday, investor interest would certainly be high given the nature and magnitude of the original deal that is being called off.

In separate announcements, the two airlines on May 2 said they had entered into a Supplemental Agreement to vary the terms and scope of the original collaboration agreement inked last August.

The share-swap last August saw AirAsia’s Tan Sri Tony Fernandes and his partner Datuk Kamarudin Meranun taking up a 20.5% interest in MAS and two board positions, in exchange for Khazanah owning a 10% stake in the regional budget airline.

The airlines said on Wednesday that pursuant to the Supplemental Agreement, they had separately entered into memorandums of understanding (MoU) in respect of firstly, to jointly explore the setting up of the joint-venture company by MAS, AirAsia and AAX to provide aircraft component maintenance support and repair services.

Secondly, the MoU was to establish the broad set of business principles for the establishment of a special purpose vehicle (SPV) by MAS, AirAsia and AAX to improve value for money and increase competitiveness and benefits to customers through procurement synergies by outsourcing to the SPV the procurement processes for identified goods and services in agreed categories



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Unisem posts net loss RM13.52m in 1Q

KUALA LUMPUR (May 2: UNISEM (M) BHD [] posted net loss RM13.52 million for the first quarter ended March 31, 2012 compared with net profit RM5.09 million a year earlier.

It said on Wednesday that revenue for the quarter fell to RM256.61 million from RM291.97 million in 2011.

Unisem attributed the declines in its revenue and profit to reduced sales volume, a one-time retrenchment costs of RM5.7 million arising from a efficiency/redundancy exercise at PT Unisem and higher depreciation charges.

Loss per share was 2.01 sen compared to earnings per share of 0.75 sen previously.

Net assets per share was RM1.56.

On its outlook, Unisem said it expects its revenue and earnings in the second quarter to improve from that achieved in the first quarter and to continue to improve to the end of the financial year.



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CIMB Research upgrades tech sector to Trading Buy

KUALA LUMPUR (March 30): CIMB Equities Research is upgrading the tech sector from Underperform to Trading Buy as sentiment is turning positive, helped by a better book-to-bill ratio.

In its outlook report issued on Friday, it said the sector was not an outright Overweight as 1Q12 may be a weak quarter, similar to 4Q11.

“In light of our recent semicon sector upgrade, we now have three Trading Buys(JCY, MPI, and Unisem) and two Neutral calls (Jobstreet and Uchi). We raise our target prices for JCY, MPI and Unisem but lower our target price for Jobstreet and Uchi. Our top picks are Unisem and JCY,” said CIMB Research.



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Stocks to watch: Mah Sing, Malaysia Pacific Corp, Adventa, BLand

KUALA LUMPUR (March 26): Malaysian stocks may continue to find support from local institutional investors on Tuesday as pre-election sentiment dominate the domestic backdrop against global economic growth concerns

Analysts said there are growing concerns on the sustainability of major economies including the the US and China, sentiment from which, have the ability to influence the direction of financial markets.

“Technically, the current rising wedge (in the FBM KLCI) already implies bearish connotations and will be confirmed upon a decisive breakout,” TA Securities Holdings Bhd said on Monday.

The research house said while the KLCI could advance, downside risk to the stock market barometer is on the rise.

The 30-stock KLCI erased its earlier gains to finish at 1,582.98, down 0.18% or 2.85 points on Monday

Stocks worth noting on Tuesday are MAH SING GROUP BHD [], MALAYSIA PACIFIC CORP BHD [] (MPCorp), ADVENTA BHD [] and BERJAYA LAND BHD [].

Other stocks are UNISEM (M) BHD [], MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI), Supercomnet Technologies Bhd, Xidelang Holdings Ltd, and CB INDUSTRIAL PRODUCT HOLDING [] Bhd.

Mah Sing has proposed a commercial property project in Kota Kinabalu’s central business district with a combined gross development value of RM830 million.

Meanwhile Amanah Raya Development Sdn Bhd is selling its entire 22% syake of Lakehill Resort Development Sdn Bhd to Malaysia Pacific Corp Bhd (MPCorp) for RM100.88 million. MPCorp said Amanah Raya Development had exercised its put option to sell the stake to MPCorp’s unit.

Adventa posted a weaker set of financial results for the first quarter ended Jan 31, 2012 with net profit falling 33% to RM2.71 million from RM4.05 million as it was impacted by margin squeeze, foreign exchange loss and higher finance cost.

Its revenue slipped 2.2% to RM103.81 million from RM106.19 million while earnings per share were 1.77 sen compared with 2.65 sen.

CIMB Equities Research has upgraded Unisem from “underperform” to “outperform” and raised its fair value by 87% from RM1 to RM1.87. CIMB has also increased its FY12 to FY14 earnings forecasts for the semiconductor manufacturer by 7% to 19%

It also upgraded MPI, also a semiconductor entity, from “underperform” to “outperform” and raised its target price for the stock from RM2.79 to RM4.08, up 46%.

Berjaya Land's net profit fell 93% to RM2.52 million in the third quarter ended Jan 31, 2012 from RM34.91 million a year ago, as lower real estate sales offset higher income from its gaming and hospitality operations. Its total group revenue rose 13% to RM1.12 billion from RM990.6 million.

Bursa Malaysia has queried wire and cable manufacturer Supercomnet on the unusual trading patterns of its shares. The stock rose as much as 93% or 28 sen to an intraday high of 58 sen on Monday before closing lower at 49.5 sen. Some 41 million shares were transacted, putting the stock among the most active and top gainers.

Xidelang shares will go ex-dividend on Tuesday. The shoe manufacturer had last January proposed a bonus share issue which is undertaken concurrently with a private placement of new shares and renounceable rights issue of warrants.

CBIP, has clinched a RM44.67 million job to build a 45 tonne per hour palm oil mill from Syarikat Ladang Sungai Terah Sdn Bhd, a wholly-owned subsidiary of Kumpulan Perladangan PKINK Bhd.



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Unisem, MPI rally on rating, target price upgrades

KUALA LUMPUR (March 26) : Shares of semiconductor manufacturers UNISEM (M) BHD [] and MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI) rallied on Monday after CIMB Investment Bank Bhd Research upgraded its recommendation and fair values for both stocks.

This is in anticipation of a recovery in the global semiconductor industry, according to CIMB Research.

Unisem rose 11% or 15 sen to RM1.48 at 3.26pm on Monday while MPI gained 3% or 10 sen to RM3.17 to be among the top gainers across the local bourse.

CIMB Research, in a note on Monday, said it had upgraded Unisem from “underperform” to “outperform” and raised its fair value by 87% from RM1 to RM1.87 for the stock. The research house also increased its FY12 to FY14 earnings forecasts for the semiconductor manufacturer by 7% to 19%.

Similarly, the research firm also upgraded MPI from “underperform” to “outperform” and raised its target price for the stock from RM2.79 to RM4.08, up 46%.



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KLCI marginally in the black, regional markets struggle

KUALA LUMPUR (March 26): The FBM KLCI managed to remain in positive territory at mid-day on Monday, while its regional peers struggled to sustain gains and were traded mixed.

At the mid-day break, the FBM KLCI edged up 0.91 of a point to 1,586.74. Gainers trailed losers by 210 to 425, while 299 counters were unchanged. Volume was 731.25 million shares valued at RM515.39 million.

The ringgit strengthened 0.08% to 3.0730 versus the US dollar; crude palm oil futures for the third month delivery rose RM28 per tonne to RM3,455, crude oil fell 27 cents per barrel to US$106.60 while gold shed 35 cents an ounce to US$1,661.55.

Meanwhile, Asian shares struggled on Monday, with materials and TECHNOLOGY [] stocks losing ground amid concerns about the impact on profits of a slowdown in the global economy, according to Reuters.

Commodity-linked currencies such as the Australian dollar steadied after a hammering last week on worries of easing demand for resources from China, while the euro held near a three-week high, it said.

At the regional markets, Japan’s Nikkei 225 was up 0.25% to 10,036.60, Hong Kong’s Hang Seng Index edged up 0.02% to 20,673.40, the Shanghai Composite Index gained 0.10% to 2,351.87 while South Korea’s Kospi fell 0.52% to 2,016.27, Singapore’s Straits Times Index shed 0.21% to 2,983.87 and Taiwan’s Taiex was down 1.34% to 7,968.33.

On Bursa Malaysia, Dutch lady was the top gainer and rose 32 sen to RM31.30.

Supercomnet, which rose 18.5 sen to 48.5 sen with 226.6 million shares done, was earlier queried by Bursa Malaysia Securities Bhd over the sharp price rise and high volume in its shares.

Other gainers included SMPC that rose 18 sen to RM1.74, HLFG up 16 sen to RM12.16, PPB 12 sen to RM16.76, BAT 10 sen to RM53.90, MajuPerak 9.5 sen to 38 sen, Unisem nine sen to RM1.42 and Nestle eight sen to RM55.98.

Decliners included Chin Teck PLANTATION []s, Far East, Carlsberg, Aeon Credit, Manulife, Tenaga, WCT and Tradewinds.

Meanwhile, the actively traded stocks included metronic, Karambunai, Focus, Ariantec, Supercomnet, Ingenuity Solutions, Trinity and DPS.



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Unisem swings to Q4 net loss

Unisem (M) Bhd posted a fourth-quarter net loss of RM2.66 million, from a profit of RM40.7 million in the same period a year earlier.

Revenue fell to RM273.2 million in the three months ended Dec. 31, from RM335.6 million, according to a stock exchange filing yesterday.

The drop was due to a reduction in sales because of the global economic slowdown, the company said. -- Bloomberg



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Market cautious in early trade

KUALA LUMPUR (Feb 22): Blue chips edged lower in early trade on Wednesday as the rally seemed to have run out of steam with PLANTATION []s among the major decliners as investors took profit.

At 9.08am, the FBM KLCI fell 1.28 points to 1,562.50. Turnover was 124.26 million shares valued at RM40.44 million. There were 112 gainers, 90 losers and 154 stocks unchanged.

CIMB Research said in its market outlook that the rebound from Friday continues to be weak as the internal sports weakness. There are more losers compared to gainers in the past week suggesting that the rally is running out of steam.

The research house said the KLCI is still below the key resistance band of 1,560-1,565, where sellers have been strong.

“We continue to wait for a close below the 1,550 levels to confirm that the trend has reversed. For now, expect more sideways movement as the bullish momentum from the September lows grinds to a halt.

“A close below the 1,550 levels would likely send the index back towards 1,530 and 1,500 next,” said CIMB Research.

Among the decliners were plantations, with Harrisons down 26 sen to RM3.44, PPB 24 sen to RM17.40, Genting Plantations 23 sen to RM9.17 and IJM Plantations seven sen to RM3.28.

Eng Tek fell six sen to RM1.67 and Unisem five sen to RM1.42 on losses in the October-December quarter following the severe Thai floods last year.

Other decliners were Perwaja, down 14.5 sen to 76.5 sen, Petronas Dagangan 14 sen to RM17.96 and Lafarge Cement nine sen to RM7.15.



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CIMB Research maintains Sell on Unisem, TP 89 sen

KUALA LUMPUR (Feb 22): CIMB Equities Research said that as expected, Unisem slipped into the red in the fourth quarter ended Dec 31, 2011.

“Unfortunately, the semicon industry is likely to stay weak in the short term as poor demand and low utilisation rates continue to plague the industry,” it said.

CIMB Research said in a research note on Wednesday that Unisem’s FY11 core net profit was broadly in line with its forecast at 105% but was 41% below consensus estimates.

“We reiterate our Sell call which we are likely to retain after today’s briefing. Our target price(89 sen) basis remains a 40% discount to its 1.0 times five-year historical average price-to-book value,” it said.



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CIMB Research has technical buy on Unisem at RM1.51

KUALA LUMPUR (Feb 20): CIMB Equities Research has a technical buy on Unisem at RM1.51 at which it is trading at a price-to-book value of 0.9 times.

It said on Monday Unisem looks set to break out of its wedge resistance. A breakout of the resistance trend line (now at RM1.54) should lift prices back towards RM1.66 and RM1.75.

“Although MACD signal line is still dwindling, we believe the downtrend will reverse soon. RSI indicator has hooked upward.

“Risk takers may take some position here while others should join the buying bandwagon when the candles swing past the RM1.54 level. Be quick to cut loss if the RM1.44 level is breached,” said CIMB Research.



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Semicon, HDD-related counters advance on positive outlook for sector

KUALA LUMPUR (Jan 25): Shares of semiconductor and hard disk drive-related counters advanced on Wednesday as investors appeared confident of a more positive outlook for the semiconductor sector.

At 12 noon, MALAYSIAN PACIFIC INDUSTRIES [] jumped 31 sen to RM3.59, UNISEM (M) BHD [] gained nine sen to RM1.44, JCY International added five sen to RM1.19 while Eng Teknologi rose three sen to RM1.73.

RHB Research Institute last week upgraded Unisem and MPI to market perform from underperform following the upbeat outlook from major players about the semiconductor industry.

It raised the fair value (FV) for Unisem to RM1.22, MPI’s FV to RM2.79 while Notion VTec’s FV was raised to RM1.69 (underperform outlook unchanged).

RHB Research said US based IC design company Linear TECHNOLOGY [] gave an upbeat outlook for the industry.

This would be the third positive guidance after Broadcom and ChipMOS, and indicates a more positive tone for the industry after a parade of negative guidance last month.

“We have already factored in a weak 1Q12 for local packaging players, as there is still lack of order visibility, but we believe the industry may be on track for some recovery in 2Q12, and stronger recovery in 2H12.

“We believe the demand weakness for chips has already been priced in. Thus, we are raising our benchmark forward target P/BV from 0.6 times to 0.8 times for the semiconductor players. We upgrade Unisem and MPI to Market Perform (from underperform),” said RHB Research.



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Unisem, Malaysian Pacific rating upgraded

Unisem (M) Bhd and Malaysian Pacific Industries Bhd rose in Kuala Lumpur trading after both stocks were upgraded to “market perform” from “underperform” at RHB Capital Bhd.

Unisem advanced 2.4 per cent to RM1.28 at 9:17 a.m. local time, while Malaysian Pacific climbed 2.2 per cent to RM2.85. -- Bloomberg



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RHB Research upgrades Unisem, MPI to market perform from underperform

KUALA LUMPUR (Jan 19): RHB Research Institute has upgraded Unisem and MPI to market perform from underperform following the upbeat outlook from major players about the semiconductor industry.

It said on Wednesday it had raised the fair value (FV) for Unisem to RM1.22, MPI’s FV was increased to RM2.79 while Notion VTec’s FV was raised to RM1.69 (underperform outlook unchanged).

RHB Research said US based IC design company Linear TECHNOLOGY [] gave an upbeat outlook for the industry.

This would be the third positive guidance after Broadcom and ChipMOS, and indicates a more positive tone for the industry after a parade of negative guidance last month.

“We have already factored in a weak 1Q12 for local packaging players, as there is still lack of order visibility, but we believe the industry may be on track for some recovery in 2Q12, and stronger recovery in 2H12.

“We believe the demand weakness for chips has already been priced in. Thus, we are raising our benchmark forward target P/BV from 0.6 times to 0.8 times for the semiconductor players. We upgrade Unisem and MPI to Market Perform (from underperform),” said RHB Research.



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OSK Research: Unisem share price may trade higher

KUALA LUMPUR (Jan 9): OSK Research says Unisem’s share price may trade higher after the strong close last Friday.

It said on Monday there is no doubt that the stock is on a downtrend since May 2010.

“But firm buying last Friday may yet spark a change in trend, and it happened on tremendous volume too, which suggest accumulation action.

“This comes on a back of slowing downward momentum, where the stock hovered just above the psychological RM1.00 for more than a month. It has even broken above the 100-day MAV line,” it said.

OSK Research said as such, purchase can be made now or preferably on pullback towards the stop-loss level of RM1.05, the low of last week.

The research house said the price target is RM1.54, which will claw back 50% of the April-Sept 2011 decline – also the low of May 2011 – and a strong move could see the price testing RM1.67, the bottom of May 2010 and high of June 2011.

“This is on the condition that the stock breaks above the 3-month high of RM1.28. In fact, a conservative trade may wait for a successful violation of the RM1.28 resistance before initiating positions, with a close below as the stop,” it said.



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CIMB Research has technical buy on Unisem at RM1.09

KUALA LUMPUR (Jan 6): CIMB Equities Research has a technical buy on Unisem at RM1.09 at which it is trading at a FY13 price-to-earnings of 8.4 times and price-to-book value of 0.7 times.

It said on Friday Unisem is still trapped in a downtrend channel but we think a short term bottom may have formed. The recent sideways consolidation suggests that a base is formed near the RM1.00 level.

“As long as prices stay above the RM1.00 level, we advocate traders to accumulate on weakness. The next upswing is likely to push prices towards RM1.14 and RM1.21. The 200-day SMA is also a magnet for prices,” it said.

CIMB Research said the MACD signal line is rising towards the zero level while RSI is also above the 50pts mark.

However, the research house said the key risk to this investment is that the stock could prolong its sideways consolidation.



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RHB Research maintains Underweight on semicon sector

KUALA LUMPUR (Jan 4): RHB Research Institute is maintaining its Underweight call on the semiconductor sector as it has yet to see any strong indications that the industry is poised for a stronger recovery.

It said on Wednesday the EU debt crisis has already taken its toll on the chips demand in the region as reflected by a sharper decline of 11.5% on-year in November (versus October: 7.7%).

“Although sales of smartphones with the latest wireless chips remained the bright spot for the industry, this was not able to offset the weak demand from the broader market.

“We believe that chip sales (especially from the US and Europe regions) will be a better indicator as to whether a sustainable recovery is in sight,” it said.

On the outlook for MPI, it said although MPI was focusing on new segments such as the automotive and mobile devices (i.e. X3-MLP and MEMS), it believes the slowing consumer spending on the broader market such as PCs and consumer electronics would have bigger knock-on effects on MPI’s medium-term earnings.

“This is mainly because revenue contributions from these segments are the highest. Hence, we maintain our Underperform call on the stock and a fair value estimate of RM2.10/share based on 0.6 times forward P/BV,” it said.

RHB Research also said Unisem was not spared too despite qualifying for new customers. Unisem’s earnings visibility remains poor given weak order visibility and customers’ lower order rate despite commencing volume loading for newly acquired customers.

“We believe medium-term chips demand would remain uninspiring given weakness in end-market demand for consumer electronics and corporate IT equipment. Therefore, we reiterate our Underperform call and fair value estimate of RM0.92/share based on 0.6 times forward P/BV,” it said.

As for Notion Vtec, the research house said while it remains positive on Notion’s camera segment on the back of rising adoption of SLR cameras amongst consumers, it is wary of its renewed focus on the HDD business.

“Recall that the company incurred substantial cost increase following its capacity ramp-up of its 2.5’’ HDD in FY09/10. Furthermore, we believe demand for HDDs could be hampered in the longer term by demand for alternative storage mechanisms i.e. cloud computing and hybrid storage. Thus, we maintain our Underperform call on the stock with a fair value estimate of RM1.21/share based on 6x FY09/12 EPS,” it said.



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