Amtek

Amtek: CS maintains neutral with 0.56 TP. House note tt Management is keen to achieve a reversal in the revenue decline seen over the past two financial years which was driven by sustained weakness in end-demand in both the consumer and enterprise segments. The automation and cost saving initiatives implemented over the past couple of years should provide the additional boost to the bottom line when revenue growth returns. Signs of a demand recovery are imminent in many segments, given the record tooling sales seen through FY13. Amtek is also seeing many new customer wins in segments like consumer electronics, automotive and casings. Mass storage is the only segment expected to see continued weakness. There is also potential for M&A to consolidate positioning in certain segments. At 7x 12-month forward consensus P/E and 1.1x P/B, valuations do not appear to be pricing in any growth or ROE improvements. A dividend yield of 6-7% also looks very defensive.