OKP

OKP: 1Q13 results missed estimates. Rev at $32m, +28.4% y/y but gross margin fell to 15.1% from 21.0% in 1Q12, chiefly due to increased subcontracting and labour costs. Net Profit -22.2% y/y to $2.4m, forming 15% of the street's FY13 estimates. OCBC note that effective tax rate fell from 16.0% in 1Q12 to 13.2% in 1Q13 due to tax-deductible purchases under the Productivity and Innovation Credit plan, which will apply through 2015. House have adjusted forecasts for OKP’s FY13 and FY14 performance. Applying the same P/E multiple of 11x to FY13F EPS, derive a TP of $0.46. House maintains HOLD rating on OKP.