ECS Holdings

ECS Holdings: Results missed expectations. Grp reported a 21.4% YoY dip in its 4Q12 net profit to $7.1m despite a 10.5% increase in revenue to $1,021.1m. Excluding forex and other exceptional items, estimate that core earnings would have decreased 16.4% YoY to $6.6m. This is below expectations due largely to a 1.1ppt slide in gross margin to 3.4%. On a positive note, a first and final dividend of $0.022 per share was declared, similar to FY11. This translates into a yield of 4.2%. Looking ahead, ECS aims to broaden its range of distribution products and services to accommodate the shift in consumer preference from PCs to mobile devices, while it is also looking to develop its own cloud-based solutions. OCBC place Buy rating and $0.56 fair value estimate under review given this set of weaker-than-expected results and ECS’s 14.1% YTD share price appreciation.