ECS Holdings (ECS) reported a 7.1% YoY increase in its 4Q13 revenue to S$1,093.9m and a 19.7% spike in PATMI to S$8.5m, such that FY13 revenue and PATMI grew by 15.3% and 16.1% to S$4,201.1m and S$34.4m, respectively. After adjusting for forex and other exceptional items, we estimate that FY13 core earnings would instead have increased by 11.8% from S$29.4m to S$32.8m. This was within our expectations, forming 99.5% of our full-year core PATMI estimate. ECS declared a first and final dividend of S$0.022/share, similar to FY12 and our projection. This translates into a yield of 3.4%. Looking ahead, ECS will continue its focus on mobile devices and cloud-based services. It will also seek to deepen and widen its distribution network in the region. As current valuation appears rich, we maintain our SELL rating and S$0.585 fair value estimate on the stock, pegged to 6x FY14F core EPS.

Source: OCBC Research - 27 Feb 2014