Huan Hsin Holdings, April 5 close : $0.595

CIMB RESEARCH, April 5

OUR visit to Huan Hsin's Shanghai factory last week confirmed that the main earnings driver for 2007 will be notebook casings, as more customers introduce IMD casings (which offer better margins).

We have kept our FY07 earnings forecast as we believe earnings will be backend-loaded due to greater contributions from IMD notebook casings. We have also left our FY08-09 estimates intact. Maintain 'outperform' with an unchanged target price of $0.83 (eight times CY08 earnings). This is consistent with its historical average PE and is at a discount to valuations for Taiwanese ODM customers. We see catalysts from an anticipated margin recovery in 2H07. - OUTPERFORM

《The Business Times》