It's a bird, it's a plane - it's Super X-Fi

Singapore

SHARES in Creative Technology defied gravity on Monday after the company announced in the morning that it will start selling its Super X-Fi audio devices in the US this week.

The counter soared 12.6 per cent, or 68 Singapore cents to close at S$6.08.

The planned US launch sparked the latest bout of fizz for the homegrown consumer electronics stock, which hit its most recent peak of S$8.75 in March after soaring by 600 per cent over a week of trading.

Sim Wong Hoo, chief executive of Creative, said in a media statement that "it's still early days yet" for the Super X-Fi technology, citing the small size of Singapore's market.

"It's my personal goal to let every headphone user on this planet enjoy the magic of Super X-Fi," Mr Sim said.

He added that "we have had a huge number of enquiries in the US about its availability" since a consumer electronics showcase there in January.

The SXFI AMP headphone amplifier will be available for pre-order on Thursday, about a month and a half after domestic sales opened. It will cost US$149.99 on the American market, compared with S$219 locally.

Mr Sim disclosed in late September that the SXFI AMP moved 600 units in its first 20 minutes, but has not shared the sales figures since.

According to the company's most recent full-year results in August, Super X-Fi sales are "expected to provide good revenue growth opportunities for the current financial year".

Sachin Mittal, an analyst with DBS, said in a report in March that his base-case valuation for the stock is S$5.56 a share, if Creative snares 1.94 million users in FY2020, while a bull-case valuation of S$8.10 would need revenue from more than 3.1 million users and "stronger than expected uptake of the Super X-Fi technology".

But UOB Kay Hian analyst Foo Zhi Wei told The Business Times: "It is very difficult to justify the price at (even) S$5 with the initial Singapore launch."

Also, how Creative products will compare with rivals' similar models on the market remains unclear, said KGI Securities analyst Marc Tan.

"In our view, investors should focus on updated sales figures and market adoption of Super X-Fi products before jumping in," he told BT.

He noted that the counter reached a six-month high on Sept 24, on the news that domestic sales would begin, but the stock has traded down in 17 of the 26 sessions since then.

Mr Tan said that, unless new details on sales figures are revealed, the price rally will be hard to sustain. The latest jump "probably has to do with short-covering as well", he added.

Still, CGS-CIMB analyst William Tng noted that Creative price spikes could occur whenever more news about the Super X-Fi comes in.