HI-P

HI-P: OSK DMG upgrades to Buy with $0.84 TP. House cite HI-P as a proxy to RIM’s revival with Blackberry Q10. The successful launch and strong take-up of RIM's BlackBerry Q10 should herald a turnaround at RIM, and this will in turn benefit Hi-P as a tier-one component supplier for RIM. House channel checks in Taiwan revealed that BlackBerry has significantly increased its BB10 device (both Q10 and Z10) build plan to more than 2m units/month in view of the backlog in demand. Since March, Taiwanese component suppliers and contract manufacturers such as Silitech (keypad) and Wistron (ODM) saw increased loadings on the back of ramp-up in orders for BB10 devices (especially for the Q10). We expect Hi-P, as a proxy play for BlackBerry's revival, to have the most meaningful leverage to RIM's recovery as BlackBerry-related products constitute around 50% of Hi-P’s revenue. With rising orders coming from key customers Apple and RIM, expect utilisation rates at Hi-P’s factories to ramp up, driving earnings growth from 2Q onwards.