BEYONICS (Lim&Tan)

S$0.171-BEYO.SI

􀁺 As warned by management, the company swung into a loss of $7.4mln from a profit of $77,000 last year. The loss widened from quarter ago’s loss of $2mln.

􀁺 The loss was attributed to 14% decline in sales for the quarter as well as the year reflecting weaker demand from hard disk drive customers as well as the weaker US$.

􀁺 Lower capacity utilization rate coupled with high manufacturing and SG&A costs as well as impairment charges resulted in 4Q loss of $7.4mln, dragging full year into a loss of $17.5mln against profit of $7mln last year.

􀁺 The loss eroded shareholders from $297mln to $263mln.

􀁺 Due to the loss, last year’s 0.5 cents dividend was discontinued.

􀁺 While the stock has already declined 34% from its 2010 high and 71% from its 2007 high, we would still avoid it as in 2009 when the company’s profit hit an all time low of $4mln, it had traded down to 0.2x price to book versus its current price to book of 0.35x.