Broadway: Announced strong set of 3QFY10 results which were broadly in line with expectations. Rev at $144.7m, was up 5.7%YoY and 2.1%QoQ, while Net Income at $12.5m was up 44.8%YoY and 25%QoQ. However grp cautions on 4QFY10 outlook, which could see lower or flat 2H2010 vs1H2010, but remain positive of long-term prospects...
3Q strong performance attributed to improvement in foam plastic and Non-HDD segments, which posted YoY increase in sales of 36.9% and 46.6% respectively, but HDD sales were down 3.7%...
Going forward, Grp expects near-term weakness for HDD business due to slowing global economy, rising labor costs in China and volatile FX rates, while foam plastic division expected to maintain growth momentum, as grp expands production capacity for its packaging and automotive segment, with establishment of a new facility in Chongqing....
We note that at current price, grp trades at an annualized 5.6x FY10E P/E vs industry average of 7.6x, and balance sheet has strengthened, with net gearing improving significantly to 19% from 38%YoY. Grp is tipped to have a conservative 25-30% dividend payout ratio projection over nxt 2 yrs, implying reasonable yields of 5%. NRA Capital has Buy rating on Broadway with $1.95 TP.
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