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By Pehon | July 24, 2007
Aztech is due to release their 1H2007 results on the 25 July 2007. So what can we expect out of Aztech?
In case you don’t already know, Aztech’s big supporter has recently release an updated report, raising the target price to $0.94 (link here: Aztech report 23-07-07). And yes, thats probably the reason why you saw Aztech exploded to its current high of $0.74.
Congrats to those who bought Aztech on my recommendation at the start of the month.
Yes, wonderful report to cause the sudden surge in price of Aztech. But what can we expect from the upcoming earnings release?
“2Q07 results would be moderately good y-o-y basis but impressive q-o-q. Historically, second half earnings have been significantly better than the first half earnings. Looking at the last three years, first half contributed 14%, 41% and 36% of full year earnings in FY04, FY05 and FY06 respectively. Since Aztech started mass production for two new customers in 2Q07 only, the impact on earnings should be visible in the 2H07. As such, we forecast 35% of full year earnings contribution from 1H07 that translates to about S$5.4m in 2Q07 earnings and growth of 6% y-o-y and 42% q-o-q. With some of new contract secured in 2Q07, we expect that earnings would be better in 3Q07 and 4Q07.”
“Moderately good y-o-y”. Should we be worried by that?
Well, I’ve to emphasis that when comparing for earning growths, its more important to compare corresponding periods of different year, ie 1H2007 vs 1H2006 and 1Q2007 vs 1Q2006. This removes any seasonal good/bad sales in the comparison.
The DBS report estimates a 6% growth comparing 1Q2007 to 2Q2007. This small growth is nothing for us to be worried about. We should be looking at the growth from 2Q2007 vs 2Q2006, and the estimate happens to be a 42% growth.
“A 42% earnings growth Q-o-Q is way above the market average, and a good sign of a growth company. Its likely to stay as such”
Shareholders of Aztech should be looking forward to a good earning report, and should not wait for long for the new target from DBS Vickers to be hit again, fast, as shown to us in the past.
Topics: Aztech |
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