World Precision

World Precision: Reported net profit of Rmb40.6m for1Q12, which was broadly in-line. Sales showed respectable growth despite seasonal weakness, as sales for conventional stamping machines rebounded 42% qoq as demand recovered after the Chinese govt eased monetary policy. Sales of high-performance/high-tonnage stamping machines contracted 6% qoq due to seasonal dip in delivery during Chinese New Year. Total rev grew 2% qoq despite the usual seasonal weakness. Margin expansion. Gross margin for high-performance/high-tonnage stamping machines expanded 4.5ppt yoy to 34.7%. Gross margin for conventional machines was stable at 26.3%. Overall gross margin thus improved 3.3ppt yoy to 32.2%. Mgt remains vigilant on cost control, noting that admin expense has moderated on a qoq basis. Order book was stable at Rmb220m as at Apr12, an improvement from the Rmb200m two months ago. Order flow from customers has also strengthened after Chinese New Year and is expected to rise further. Ratings as follow: DBSV maintains Buy with $0.68 TP UOB Kay Hian maintains Buy with $0.88 TP