Hi-P

Hi-P: FY12 results came in slightly above estimates; Earnings up 65% y/y to $15.6m, revenues down 13.5% y/y to 365m. Stronger than expected numbers came as a result of $2.9m one-off income, while the decent operating performance was due to the initial benefits of the ramp up of the iPhone 5 production in the first two months of 4Q as as Apple did not cut its suppliers’ until December. Hi-P announced the resignation of its chief operating officer Mr. Tjoa Mui Liang, whom we believe to be responsible for the business development activities as well as the overall operational planning (E.g. production capacity). Going forward, the Group slash its FY12 dividends by half to 1.2¢ and is expecting to report a loss in 1QFY13. DMG view that Hi-P is now going through a difficult time in downsizing its operations to cope with the poor customer demand. We expect the group to be barely breakeven if not loss-making in 1HFY13. DMG maintain SELL, and reviewing its current TP of $0.58; CIMB maintains UNDERPERFORM, TP of $0.64;