HI-P

HI-P: Counter is u p 5.2% today, following Apple’s ~5% jump in after trading hours, as the tech giant delivered stronger then expected 3Q results buoyed by strong quarterly sales of its iPhone. Analysts guides that in a bid to regain market share, Apple could begin rolling out smartphones and tablets with bigger screens in the coming quarters, with unconfirmed rumors that the tech giant and suppliers are currently testing on smartphone screens which are larger than four inches and tablet screens slightly less than 13 inches. Apple’s CEO, Tim Cook also refused to disclose the possibility of a lower cost iPhone or any other products in the pipeline, despite market sources earlier indicating that Apple could be launching a low cost iPhone within the next few quarters as they attempt to win market share in emerging markets. We note that the latest Apple’s earnings figures could offer some respite to the recent share price decline in SGX-listed Hi-P, after key client Blackberry saw a less then successful take-up in its Blackberry 10 devices and industry leader Samsung lost ~US$25b of its market capitalization last month, as sales of Galaxy S4 missed estimates. Unconfirmed rumours has also tipped Hi-P to be involved in the manufacturing or production of Apple’s new low-cost iPhone. Overall, we note that Hi-P’s fundamentals remain strong, with share price backed by a net-cash of $96.7m or 15.5¢ per share and current valuations are undemanding, with the group trading at 10.5x ex-cash forward P/E versus its historical average of 17x.