Hiap Seng: FY11 results way below expectations.
Revenue -25.3% yoy to $188m, due to lower revenue recognition. Gross margins fell sharply to 13.6% from 22% a year ago, on cost overruns for certain projects. Net profit -74.3% to $8m, on further negative impact from the $2.7m forex loss due to the weakening USD.
The co proposed a 1ct final dividend in addition to an earlier 1 ct interim div. Total div of 2cts (4.1% yield on $0.49 last close) came in below expectations of 3cts...
Order book stands at $195m. Singapore remains its main contributor of revenue at over 67%. Its most recent contract was with Vietnam’s Dung Quat Refinery for maintenance, overhaul and repair services worth $8.4m.
Stock trades at 18.8x trailing P/E.
CIMB downgrades to Underperform from Trading Buy, slashes TP to $0.43 from $0.67, in view of Hiap Seng’s patchy track record and mounting margin pressure.
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