Kunda is also working hard to acquire new customers for its IMD business and automotive mould business. Efforts to diversify into moulds for aircraft-related interior components are also ongoing.
Still cautious customers and the holiday season in Europe could see Kunda’s delivery schedule being pushed back and a significant portion of their mould orders are slated for delivery in August/September period. This could cause 1HFY3/10 net profit to come in at a lower percentage versus our full year forecast of HK$60.1m. As management is not seeing any order cancellation, we suspect Kunda could see its full year net profit being second-half loaded.
No changes to our forecast and recommendation. Maintain BUY with S$0.23 target price. Meiban’s average CY09-10 P/E has risen to 6.9x versus 5.6x when we initiated coverage on Kunda.
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