Hi-P International

[yogi]

Current valuation of Hi-P seems attractive considering that it trades below NAV and PE is around 6 times. strong position with price/cash ratio of 2.24 times.

But my concern is that company's 65% revenue contribution comes from mobile phones related business. Recently company's revenue and profits were not stable. Not sure if Nokia is its one of major customers in that case company would be facing challenges in future.

Company doesn't reveal much information about its customers (at least major).

Anyone knows about Hi-P's customer base?

[d.o.g.]

Anyone knows about Hi-P's customer base?

Main customer is RIM (Blackberry) who accounts for about 40% of total sales IIRC.

[yogi]

RIM is facing very strong competition from Apple. RIM's revenue since 4Q2010 is reducing and latest Q's revenue is less than 50% of 4Q.

Hence I think Hi-P would be facing headwinds. No wonder why last two quarter's revenue has be declining (QtoQ) though company uses the execuse of seasonality.

BTW, somewhere I read in one of their annual reports that its largets customer's contribution to revenue is < 20%.

[ngcheeki]

The following is the estimated revenue contribution by L&T

We estimate that RIM accounts for about 50% of
Hi-P’s business and is the single largest customer
after Apple (which we estimate contributes about
20%).

See the attachment for the report for Hi-P on 16 Sept 2011.

[yogi]

recenlty there was clarification announcement about its latest financial statement ending 30 June 11 that its not false or missleading.

But there is no mention of why company has to suddenly release such announcement. Any idea why is this release?

[kbl]

EPS:
Q1-13 Q1-12
2.6% 0.5%
1.2% 0.3%
0.83 0.18

**For 2013, the Group will focus on:
- Regaining its growth momentum by diversifying its customer base.
- Continuing to improve upon its cost structure via automation and lean manufacturing.
- Last but not least, continue to deliver value to shareholders through profitability and growth.
Over the long-term, the Group’s goal is to achieve a sustainable growth rate and be one of the top contract
manufacturers in Asia, by providing a one-stop solution to fulfill its customers’ needs - from industrial design,
component manufacturing to high-level assembly.
Barring any other unforeseen circumstances, the Group wishes to guide its performance as follows:
The Group expects to record higher revenue in 2Q2013 as compared to 2Q2012. The Group expects to record a
profit in 2Q2013.
The Group expects to record higher revenue and profit in 2Q2013 as compared to 1Q2013.
The Group expects higher revenue and profit in FY2013 as compared to FY2012.**

Vested

[kbl]

The Board of Directors of Hi-P International Limited (the "Company") wishes to announce that the Company will release its Second Quarter financial results for 2013 via SGXNET before the opening of trading on 2 August 2013.

[kbl]

http://infopub.sgx.com/FileOpen/Hi-P_2Q2...eID=250340

EPS 2Q'13....1.32cts...1st half '13.....2.16cts

**Barring any other unforeseen circumstances, the Group wishes to guide its performance as follows:
The Group expects to record higher revenue and profit in 3Q2013 as compared to 3Q2012.
The Group expects to record higher revenue and profit in 2H2013 as compared to 1H2013.
The Group expects higher revenue and profit in FY2013 as compared to FY2012.**

[AlphaQuant]

Quite a shocker of a quarter - prob the worst quarter i've seen since 2010?

Below from Lim&Tan
**************************

HI-P (57 cents, up 3 cents)
As guided by management in late Jan’14, the company
swung into a loss of $14.5mln in 4Q’13, dragging
full year 2013 profit down 64% to $6.4mln.
However, if we exclude inventory provisions of
$4.7mln and one time impairment costs of
$13.5mln, operating profit would have been about
$4mln for 4Q’13, still significantly below their usual
quarterly profit range of between $15-20mln,
reflecting weakness from their key customers
Research In Motion and Apple. Final dividend
was halved to 0.6 cents, giving a yield of only 1%.
Looking ahead into 1Q’14, management expects the
difficult operating environment to continue and
expects to report a loss. Without signs of a
recovery in sight, we maintain our SELL
recommendation.

[Tiggerbee]

http://infopub.sgx.com/FileOpen/Hi-P_3Q2...eID=321640
http://infopub.sgx.com/FileOpen/Hi-P_3Q2...eID=321638
http://infopub.sgx.com/FileOpen/Hi-P_3Q2...eID=321639

Hi-P achieves increase in 3Q2014 net profit mainly due to
improving product mix and continuing cost control
• 3Q2014 revenue down 32.7% yoy to S$245.7 million mainly due to lower sales from
two key customers, partially offset by orders from existing and new customers
• Gradually shifting from plastic to metal components for wireless segment to ride on
the industry-wide design changes
• Expects lower revenue but higher profit in FY2014 as compared to FY2013

Revenue decreased by 32.7% yoy to S$245.7 million in 3Q2014, mainly due to decreased sales volumes from two key customers who were affected by the drop in market demand and changes to their business strategies. The decrease in revenue was partially offset by orders from existing and new customers, which was in line with our strategy to increase allocation from existing customers and diversify our customer base.
Despite the 32.7% decrease in revenue, gross profit only registered a 3.1% slight decrease. Gross profit margin increased from 6.5% in 3Q2013 to 9.4% in 3Q2014 mainly due a positive shift in product mix.
Net interest income increased by 310.4% to S$0.2 million in 3Q2014, mainly due to higher net cash balances in 3Q2014 as compared to 3Q2013.
Other income increased by 63.6% yoy to S$3.1 million in 3Q2014 mainly due to higher incentives from the applicable local governmental authorities in the PRC, and service income from trial runs conducted for customers.
Total selling & distribution and administrative expenses decreased by 23.4% yoy to S$17.5 million in 3Q2014, mainly due to the reversal of warranty provision of S$2.7 million in view of the expiry of warranty period. The decrease was also a positive result of the Group’s continuous cost control improvement.
Other expense became an income of S$4.5 million in 3Q2014, which mainly consisted of net foreign exchange gain of S$2.9 million (3Q2013: loss S$1.1 million), which arose mainly from the appreciation of USD against SGD, and reversal of impairment loss on property, plant and equipment of S$0.9 million.
The Group recorded an income tax expense of S$2.7 million in 3Q2014, representing an effective tax rate of 19.8% (3Q2013:17.3%).
As a result of the above factors, the Group achieved net profit after tax of S$10.8 million in 3Q2014.
Current and non-current loans and borrowings increased by 4.9% from S$103.2 million as at 31 December 2013 to S$108.3 million as at 30 September 2014, mainly for hedging purpose and general working capital purposes of our subsidiaries.
Cash and cash equivalents including cash and cash equivalents of disposal group classified as held forsale increased by 25.2% from S$138.9 million as at 31 December 2013 to S$174.0 million as at 30 September 2014. As the total debt was S$108.3 million, the Group maintained a net cash position of S$65.7 million (31 December 2013: S$35.7 million).
“Metal components have become an essential design element of smartphones, with the recent model launches continuing the shift from plastic to metal frames. Responding to the increasing demand for metal components, we have made prudent investments in metal technology, equipment and the relevant human resources. With our concentrated company-wide effort, we have shortened our learning curve and made considerable progress.
In addition, with our restructuring strategy in forming Business Units to address specific business segments and integration of our operations, we have achieved better responsiveness to our customers’ product demands. As a result, new products that were launched in this quarter contributed approximately 60% to our overall 3Q2014 revenue. To continue our growth momentum, we have acquired new customers in the United States and China, with anticipated volume shipment in 4Q2014 and early 2015.
Buoyed by our positive progress and result, we remain confident in achieving a higher profitability for FY2014 as compared to FY2013.”
Mr. Yao Hsiao Tung (姚晓东), Executive Chairman & CEO