ECS

ECS: ECS may attract interest after Apple more than doubled its 3Q11 profit to US$7.3b, smashing street est of US$5.9b, lifted by record sales of iPhones & iPads. Apple’s expansion into China & other fast-growing economies helped make up for slower growth in the US. Sales in China reached US$3.8b, up almost sixfold from a year earlier, accounting for 13% of grp revenue.

ECS clinched the distributor rights for iPad & iPhone in China in Dec 10 & is currently ranked 4th largest distributor of IT products in China by revenue. China makes up 45% of ECS' revenue followed by Thailand & Malaysia contribute 15-16% each, while Philippines, Indonesia & Spore each accounts for around 8%. In FY10, the group posted a net profit of $53m (+39%) on revenue of $3.1b. Stock trades at P/E of under 5x & P/B of 0.9x. Stock may be turning around from oversold level with RSI at 34 & Stockhastic crossover below the 20% mark. Topside resistance is at $0.77.