Silverlake Axis: CIMB notes recent 1Q12 core earnings of RM 27.8m (+20% yoy) formed 17% of full estimates, inline with expectations. This was driven by a larger orderbook and 2 large sales of hardware pdts. Expects revenue recognition to ramp up in 2Q, as i) Silverlake had delayed recognition from HNA group contracts as they were waiting on an external vendor to sign off on their contract delivery, and ii) recognition from Thai contracts was delayed bcs of the floods.
CIMB is confident about Silverlake’s orderbook, forecasts ~RM 210m contract revenue to be recognized this yr, in contrast to 2009 where Silverlake was caught at the tail end of its orderbook.
The co declared 0.2cts div.
CIMB keeps at Buy with TP $0.43.
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