HI-P

HI-P: Bloomberg reported that Apple is giving orders for its new lower priced mass market iPhone to Pegatron Corp as part of a strategy to reduce risk and diversify its supply chain. Hi-P is a supplier to Pegatron Corp for Apple’s iPhones and iPads and the latest contract win for Pegatron Corp for the low cost iPhone will benefit Hi-P. More importantly, the new iPhone will have a plastic casing which is Hi-P’s forte as the co started off as a plastic injection moulding company and only started the metal component business 2 yrs ago. Together with new orders from Apple as well as the ramp up in Blackberry, Motorola and Amazon, Lim & Tan expects a 177% rise in profits for Hi-P this year to $50m, translating to an undemanding forward PE of 13x.