STOCKS NEWS SINGAPORE-CIMB cuts Hi-P to underperform, shares fall
CIMB Research downgraded Hi-P International Ltd to 'underperform' from 'neutral', citing the electronics component supplier's weaker than expected third-quarter earnings outlook.
The broker cut its price target to S$0.70 from S$0.95. Hi-P shares fell 7.7 percent to S$0.77, with 2.9 million shares traded, 1.5 times the average full-day volume traded over the past 30 sessions. The stock has risen 29 percent this year.
Hi-P supplies parts to companies, including Apple Inc and BlackBerry maker Research in Motion Ltd.
"It seems the company's turnaround has been pushed back, and we now believe that its prospects may not be as positive as we had previously thought," CIMB said in a report after downgrading Hi-P to neutral on Friday.
On Friday, Hi-P said the group expects to report lower revenue and profit in the third quarter from a year earlier, mainly due to lower orders resulting from delays in projects startup from existing and new customers.
CIMB also reduced Hi-P's 2012-14 core EPS forecast further by 44 percent to 78 percent.
"We were already expecting the supply constraints for the iPhone 5 and weakness in other major customers to affect Hi-P; however the magnitude of the fall in earnings appears to be much larger than expected as Hi-P's announcement indicated that projects from more than one customer was delayed." (Reporting by Viparat Jantraprap in Bangkok; Editing by Anand Basu; firstname.lastname@example.org)
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