Hi-P

Hi-P: good 1Q11 results.
Swung to net profit of $17.9m vs $14.2m loss last yr, driven by higher sales and margins.
Revenue +66% yoy to $243m, mainly due to new projects. Co now supports customers in both high-end and mid-end phones vs just the high-end in 1Q10…
ben_oh: Gross profit +509% to $39.7m mainly due to economies of scale, improved productivity, pdt mix and effective overall cost control in 1Q11. Total selling & distribution and administrative expenses were also well managed and increased by just 9.8% yoy to $18.2m...

Mgt positive on outlook, expects to reap the benefits from the fast growing tablet business. Expects higher revenue and profit in 2Q11 yoy and qoq, due to more assembly. Also expects higher revenue and profit for FY11 yoy. But flags some uncertainties due to possible supply chain issues from the Japan earthquake…

Positive read through from Foxconn’s 1Q results (beat expectations) also bodes well for Hi-P, as the former benefitted from stronger Apple pdts (iPad/ iPhone) and higher margin contribution from the light metal casing business, which Hi-P also specializes in…

Industry estimates for the new MacBook Air to be launched in late 2Q/early 3Q could be a catalyst if it adds to Hi-P’s order flow.
Stock trades at 10.3x P/E, vs Foxconn’s 18x.
Pre-results, the Street had unanimous Buy ratings on the co, with recent TP ranging btwn $1.43 – 1.60.