Beyonics

Beyonics: FYJul10 net profit jumped 67% yoy to $6.9m, as higher gross margin arising from improved product mix and better cost control more than made up for the marginal dip in revenue. Revenue from the precision engineering services (PES) division grew 15% to $151m mainly due to improved conditions in the hard disk drive and automotive industries, while revenue from the mainstay electronics manufacturing services (EMS) division dropped 3% to $1.4bn mainly due to selling price erosion…

First and final dividend of $0.005/sh translates to ~2% yield. Mgt however, is cautious on outlook. Expects the business environment to continue to be challenging and highly competitive, on the back of increasing cost of materials, currency fluctuations and expected increase in labour costs. Stock trades at 0.4x PB, 18.8x PE, reflective of its low return on equity.