(BUY, S$0.52, TP S$0.60)
Following the announcement of Apple’s founder Steve Jobs’ passing, Epicentre tumbled 10%
before closing up 1% yesterday. Likewise, shares of Apple Inc’s remained relatively unchanged.
We believe this is reflective of investor confidence in the future of Apple. Jobs had named his
successor Tim Cook whom he had relinquished his position to on 24Aug11 and with the current
products it has in its stable, the general market believes Apple’s current products will last
several product cycles due to its forefront technology. We re-iterate our BUY call on Epicentre
with a TP of S$0.60, pegged to 9x FY12F P/E. At current price, stock offers a decent 6% yield.
Passes on a day after new product launch. On Wednesday, Apple’s founder Steve Jobs
passed away at age 56 following a long battle with cancer. He was the man behind the creation
of the Mac, iPhone and the iPod. In January he had relinquished his day-to-day duties at Apple
but still remained very much hands-on until 24Aug11 when he announced he could no longer
meet his duties, naming Tim Cook as his successor. His passing comes a day after Tim Cook
unveiled its latest smartphone, the iPhone 4S.
Future of Apple? Apple Inc’s stock price has remained relatively stable, just slipping 0.4%
following Jobs’ death. Epicentre saw its stock dive 10% after the news but closed unchanged
yesterday. The resilience of Apple’s share price is reflective of investor’s confidence in the future
of the company as Jobs has managed to select and train a reliable successor. His creations
such as the iPhone, iPad and Mac is likely to be able to survive several product cycles ahead.
According to industry research firm Gartner, the iPad currently dominates the tablet industry with
a 73% market share and expects it to have at least 50% market share through 2014. For the
record, Epicentre commands an estimated 30% market share of the iPad market in Singapore.
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