Sarin

Sarin: FY12 net profit of US$20.8m (+20% YoY) came in slightly below Maybank’s forecast of US$22.1m, (Only house in street which covers stock), but house believe that sales recovery is on track to resume to normal levels from 1Q13. Full-year dividends was 4.5 US c/sh, implying an attractive yield of 4.5%. Sales of GalaxyTM units should accelerate in FY13 after the slow-down in 3Q12. Expect an addition of 45 units in FY13F, adding to a strong recurring revenue income base which should account for 31% of revenue by end-FY13F. Its penetration into the polished diamond market is also seeing success with initial commercial agreement established with a leading retail chain in Asia. Be reminded that Sarin has the potential to create structural changes in the diamond industry with its innovative technologies. Maybank-KE Reiterate Buy with TP of $1.48.