S$0.165-BEYO.SI
- As warned by management on 3 June 2011, the company swung into the red with a loss of $2.04mln against profit of $628,000 a year ago for the 3 months to Apr ’11 on the back of 21% yoy decline in sales to $302.77mln.
- The reasons cited for the loss were continued weak demand from hard disk drive customers, weak US$ against Asian currencies and dis-economies of scale.
- Looking ahead, management continues to warn of a highly challenging and competitive business environment, uncertain demand conditions in the technologically challenged hard disk drive industry, costs inflation and unstable currency movements.
- The weak performance and continued downbeat outlook from management suggest that investors would be better off to continue staying away from the stock notwithstanding its depressed share price, currently trading at a 2 year low.
- In late 2008 and early 2009, the stock had hit 9 cents a share. Founder and Chairman Chay Kwong Soon had then picked up 21.7mln shares at 9 cents each, raising his stake from 11.85% to 15.9%.
- We maintain SELL on the stock at current level, but if the stock were to retest the 9 cent level again in the future, we believe it would be worth a re-look.
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