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Niche player stays sound

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Varitronix Recommendation: Buy Brokerage: Smith New Court A STRONG niche player, the fundamentals of Varitronix remain sound. Although the anticipated initial losses of the group's new factory in Malaysia have led to a downward revision of 1993's earnings forecast, the expanded capacity should underpin a 28 per cent rise in the 1994 bottom line.

The group has an established niche in the global LCD market and annual global sales are forecast to jump from US$4 billion to US$16 billion by the year 2000.

Great Eagle Holdings Recommendation: Buy on weakness Brokerage: G K Goh INTERIM earnings fell by 53 per cent to $80.2 million, in line with expectations. Turnover increased by 7.1 per cent to $309.7 million but profit margins were not comparable because there were no contributions from property sales this year.

Citibank Plaza is now 65 per cent occupied and full occupancy is expected soon because of the rising demand for Grade A office space in the Central area. Great Eagle Centre and Astor Plaza are over 95 per cent let. In May the group agreed to sell the London Plaza for $810 million and non-refundable deposits of $81 million have already been received.

Trading on a prospective fully diluted P/E of 16.6 times and 12.2 times of FY94 earnings, it seems slightly overpriced.

Manhattan Card Co Recommendation: Buy Brokerage: S. G. Warburg MCCL rose 38 per cent on the first day of trading, with over 50 per cent of the free float traded. The public offer had been oversubscribed by 40.9 times.

The company's forecast of $215 million for 1993 is slightly conservative. Profit growth in 1994 and 1995 should be sufficiently strong to offset the impact of dilution.

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