Amtek Engineering: Maybank Kim Eng Initiates with Buy; with 52.4% upside to TP of $1.09. Note that armed with expanded capabilities post restructuring, Amtek is poised to ride the next wave of outsourcing by OEMs and to enjoy higher margins than its contract manufacturing peers.
Superior ROE, high dividend yield and opportunities for margin expansion are what you can expect from the stock. Yet, it is still trading at valuations lower than its EMS and ODM peers. Add that it has been and still is a tough year but earnings appear to be bottoming out. Expect recovery growth from 4QFY Jun12. Recommends accumulate now at attractive valuations with 5.2% dividend yield.
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