Hi-P

Hi-P: 3Q12 results weak, as expected by CIMB, but below consensus. Revenue at $272m, -12% yoy, on delays in new projects. Net profit at $3m, -54% yoy, due to lower operating leverage on weaker sales. CIMB notes the weak 3Q12 was a results of supply constraints for the iPhone 5 and weakness in other major customers. On outlook, mgt guided for higher 4Q12 revenue and profit on a yoy basis and lowered revenue and profit for FY12. Said 2012 had been a difficult yr for companies due to macro conditions, but remained confident that the robust sales of tablets and smartphones will continue to affect the industry and company positively. CIMB however notes that given Hi-P will spend a record capex of $180m for FY12 with not much to show for it so far, it remains skeptical about Hi-P’s ability to generate the kind of profits that was initially expected. The house keeps at Underperform with TP $0.70.