Brokers' take

Hi-P International | Buy Target price: S$1.07 May 23 close: S$0.87 DBS Group Research, May 23

The smartphone and Internet-of-things (IoT) segments are expected to continue to do well in the next one to two years. Hi-P is capitalising on this trend, with the ramp-up in production. Hi-P is expected to expand production, in particular at its Suzhou plant, in preparation for orders from its new customers, and also new products from existing customers. Overall utilisation rate for Q1 2017 was below 40 per cent. With the expected ramp-up in production, we expect utilisation rate to reach 60-70 per cent in the next one to two years.

Hi-P could be an attractive target for global companies looking to build a base in Asia. To date, there is still no concrete succession plan announced by its executive chairman and chief executive officer, Yao Hsiao Tung, who has a 61 per cent stake in the company.