Amtek

Amtek: Announced 2Q12 results which were below estimates. Rev at 155.6m, -11% yoy and -14.4% qoq, while net profit at $8.0m, -39% yoy and -11.9% qoq. Gross margins dipped slightly at 16.3% vs 18.7% yoy. Result brings 1H12 rev to 337.3m, -1% yoy and net profit to $17.1m

Drop in rev was due to the challenging business environment in 2Q12, where grp saw a 5% decline in Consumer Electronics products sector; a 5% decline in Casing and Enclosures product sector sales, a 16% decline in Mass Storage product sector sales due to supply chain disruptions caused by the floods in Thailand and a 6% decline in Others product sector rev due to slowdown in customers’ demand across the sector.

Sectors which saw growth included grp’s imaging and printing product sector which grew 17%, while demand for Automotive products remained positive in the PRC throughout 1H12. Notwithstanding weaker demand in Europe, Grp’s Automotive product sector registered a growth of 9% yoy in 1H12.

Going forward, grp retains its level of investment in the business infrastructure and believes that conditions should recover progressively throughout 2012. Barring unforeseen circumstances, Group expects to remain profitable in FY12

We note that overall, balance sheet remains strong with net gearing at a low 20.8%, while at current price, grp trades at an annualized 10.1x FY12E P/E vs historical average of 14x.

Ratings as Follow:
CIMB maintains Neutral with $0.79 TP.