Monday, May 21, 2012

Notion VTEC: Maintain Buy - Addressing the heart of the matter

Bullish sales guidance. We came away from Notion’s analyst briefing positive on its near-term earnings momentum. Management is bullish on its prospective sales (FY12: +34%, FY13: +26%), supported by the new baseplate outsourcing demand. We think market’s skepticism on the sustainability of Notion’s post Thai flood-driven sales has been largely addressed by Minebea’s decision to outsource for the mediumterm, at least. We upgrade our FY12-14 EPS by 11-32% but maintain our TP, pegging to its mean PER of 8x (4x EV/EBITDA previously).

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Source: Maybank Research - 21 May 2012

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