Hi-P

Hi-P: 4Q14 at the upper end of estimates, as net profit turned around to $15m (4Q13: -$14.5m), despite an 8.7% slump in revenue to $314.4m, due to lower sales volumes from two key customers, partially offset by an increased allocation from existing customers and new ones.

The bottom line gained on improved gross margin of 9.4% (+5ppt y/y; -0.1ppt q/q) due to a shift in product mix and the absence of consolidation and relocation costs, and also boosted by one-offs comprising a gain following the liquidation of Hi-P Mexico ($4m) and insurance claim ($1.3m). In addition, selling and distribution expenses lowered by 25% as a result of improvement in cost control and lower impairment loss on asset (-65%).

For the year, earnings surged 64% to $10.5m, while revenue dropped 25% to $951.4m.

Going forward, management guided for higher revenue y/y for 1Q15, but expects to record a loss, and for revenue and earnings to be higher in FY15.

First and final DPS of 1¢ (FY14: 0.6¢) was declared.

Still, investors may consider keeping the counter on their radar following key client Apple’s recent record-topping market cap of US$711b, as well as the growing emergence of China’s Xiaomi and Russia’s YotaPhone, which Hi-P supplies parts and components to.

BVPS of $0.7414.