Hiaptek has announced its results for 3Q2008 ending 30/4/2008. Its net profit increased by 101% q-o-q or 180% y-o-y to RM46.0 million while its turnover increased by 3.6% q-o-q or 32.8% y-o-y to RM446 million. The improved performance was attributable to higher business volume to strong market demand coupled with the increase in steel prices. The company expects its profit margins to soften because its input cost is catching up with the selling price of its products. Going forward, the company's manufacturing division is likely to benefit from its American Petroleum Institute (API) monogram certification and the CE mark (a mandatory conformity mark on products aimed at Europe), coupled with the global shortage for steel pipes.
A recent report from OSK Research reiterated its buy recommendation on Hiaptek at RM1.60 but lowered its 12-month target price to RM2.84 due to market uncertainty, adding that the fair value was derived from the latest 10 times steel sector price earnings ration on CY08 numbers (go
here).
Chartwise, Hiaptek's uptrend is still intact, with uptrend line support at RM1.50-55.
Chart: Hiaptek's weekly chart as at June 26th (source: Quickcharts)Based on improved performance & nice technical picture, Hiaptek could be a good investment for the medium-term.
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