World Precision

World Precision: UOB Kay Hian maintains Buy with $0.54 TP. House note that World Precision reported a 40% qoq increase in revenue in 1Q13, benefitting from a pick-up in orders, driven by demand from the automobile industry and a recovery from home appliances manufacturers. Growth momentum has so far maintained in 2Q13. Balance sheet has strengthened with reduced borrowings. World Precision benefitted from a pick-up in orders since March, helping to generate a sequential rebound in 1Q13. Sales for conventional stamping machines increased 35.8% qoq while sales for highperformance/ high-tonnage stamping machines gained 46.4% qoq. Business sentiment has improved after the smooth political power transition in China. World Precision was also able to increase ASP for conventional stamping machines by 10.5% yoy due to its leadership in this product segment. Orders have picked up since March and the positive momentum was maintained in April. Its orderbook has grown from Rmb118m in Feb13 to the current Rmb150m. Going forward, house note that there could be potential asset injections from parent co World Group, an industrial equipment conglomerate involved in the production of agricultural machinery, construction equipment, gantry cranes, horticultural tools and automobile component.