activities. Maintain BUY.

sets of positive results and possible dividend surprises.We have kept our FY07-09

Lim & Tan Securities Pte Ltd: Daily Review, 2 May 2007 Page 3 of 9

 

SGX-ST Member, SGX-DT (CNCM)

 

TECHNOLOGY SECTOR

 

Dividing Fortunes

 

Amtek

 

�� 3Q ended March 2007 net profit rose 36% yoy on

 

the back of 23% yoy increase in sales to US$162mln.

 

Sequentially net profit declined 15% while sales

 

declined 5% respectively, in line with the seasonal

 

trend. The results were in line with expectations.

 

�� Operating cash flow was robust at US$19mln, more

 

than enough to cover capex of US$6mln. After

 

repayment of loans of US$8mln cash holdings was a

 

robust US$49.3mln versus debts of US$90mln. With

 

shareholders funds of US$207mln, net gearing is

 

only 20%.

 

�� Looking ahead, management remains optimistic of

 

prospects, citing strong demand for automotive,

 

computer and computer peripheral sectors, and the

 

outsourcing trend from customers in Europe and

 

US. A new plant in Poland which will be set up by

 

1Q ending Sept 2007 will enable the company to

 

capitalize on further growth opportunities there.

 

Management will also be setting up a tooling design

 

office in India to better serve their customers there.

 

�� At 7.5x forward PE against 25-30% growth potential

 

going forward and yield of 4%, we maintain BUY.