KEY IDEA ECS Holdings: Upgrade to HOLD ECS Holdings is likely to benefit from the expected increase in global IT spending in 2014, especially on the enterprise software front. Although its recent 1Q14 results fell short of our expectations, this was partly due to a transition in strategy for its Apple business in China towards more focus on the commercial instead of the consumer market. ECS has also continued to clinch a large number of awards from its strategic partners last year, which we believe is a strong testament to its leading capabilities as an IT distributor in the region. We lower our FY14 revenue forecast by 13.8% but retain our PATMI projection due largely to a higher gross margin assumption from a better product mix. Rolling forward our valuations to 6x blended FY14/15F EPS, our fair value estimate is increased from S$0.585 to S$0.61. Upgrade ECS to HOLD as we believe downside potential is now limited. (Wong Teck Ching Andy) |
For more information on the above, visit www.ocbcresearch.comfor the detailed report. |
NEWS HEADLINES - The S&P 500 Index rose by 0.65% to close at 1,940.46 on 5 Jun 2014. - According to The Business Times, the European Central Bank has cut the base interest rate from 0.25% to 0.15% and the deposit facility of banks to -0.1% to reverse economic stagnation and head off deflation. - Singapore Press Holdings, FTSE Group and Singapore Exchange reported at the quarterly review that the constituents of the Straits Times Index will remain the same. - Centurion Corporation has established a 49% associated Malaysian company, Oriental Amber Sdn Bhd. Oriental Amber entered into a sale and purchase agreement to acquire a 7.6 acres freehold land in Jeram Batu for a cash consideration of MYR11.7m. - ES Group secured repeat jack-up drilling rig blocks orders of S$17m from a major Singapore shipyard. - China New Town Development announced that it has auctioned the land use right of a land parcel located at the Group’s Shanghai Luodian project to Shanghai Ruilong Investment for a reserve price of CNY124.5m. |
This is a blog on the Singapore Stock Market with reports from the broking houses and some commentaries by me. Readers are advised to take the reports with an open mind and to make their own analysis as the market is dynamic and things change very rapidly. Follow the reports and recommendations at your own risk.
Friday, June 6, 2014
OCBC Report 6
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