Z-Obee Holdings

Z-Obee Holdings: 3Q13 results released, revenues increased earnings increased 390% y/y for 3Q13 and 212% for 9M12. Such increase was mainly due to the increase in the Distribution and Marketing segment. However, gross profit margin decreased from approximately 6.07% in 9M12 to approximately 4.39% in 9M13. The decrease in gross profit margin was mainly due to the change in sales mix with the decrease from the Assembly segment. Mgmt stated that after two consecutive quarters of decline in mobile handset sales globally, there were positive signs for the market during the third quarter of 2012. The worldwide mobile handset is forecast to grow 1.4% year-on-year in 2012 according to the International Data Corporation; while for 2013, it is forecast to grow 45.1% year-on-year to 717.5 million units, attributing it mainly to China. The strong growth of smart-phone sales come from replacement of mobile handset sales in mature markets as well as a growing array of sub-USD250 smart-phone in emerging markets. Z-Obee currently trading at 6.2x P/E, 0.7x P/B.