DBS’s lower earnings estimates comes on expectations of margin pressure within the supply chain due to recent trade-war tensions between the US and China, which DBS believes Hi-P will not be spared from.
SINGAPORE (Aug 2): DBS Vickers Securities is maintaining “hold” on Hi-P International with a lower price target of $1.21 compared to $1.80 previously, after cutting FY18F and FY19F earnings by 23% and 29% respectively to account for lower margins.
The new target price is based on a 30% discount to peers’ average PE of 16 times, versus 20% discount previously, on blended FY18F and FY19F earnings.
