Excelpoint

Excelpoint: 2Q14 net profit rose 24.3% to US$1.9m while revenue increased 14.2% to US$194.9m on stronger market demand for memory products. Gross margins slid 1.1 ppt to 6.1% on higher sales of memory products which normally yield lower margins. Net profit rose at a faster clip on the reduction of operating expenses and sale of non-core R&D division. The deployment of 4G in China, launch of new smart phones and tables and Chinese government’s economic stimulus paints a rosy outlook for Excelpoint. In addition, it is also high season for its EMS customers in ASEAN on the back of American and European economy. Excelpoint trades at 5.3x annualized 2Q14 P/E