Dyna-Mac Holdings reported a 27.1% YoY increase in its revenue to S$97.4m for 2Q14. However, PATMI dipped 19.9% to S$6.0m and fell short of our expectations. This was largely due to a sharp 57.4% jump in administrative expenses to S$10m. Hence, Dyna-Mac’s PATMI margin fell 3.6 ppt to 6.2%. For 1H14, revenue surged 29.0% to S$176.3m. PATMI was down 7.5% to S$13.2m, and formed 43.7% of our FY14 forecast.

Dyna-Mac’s current order book stands at S$266m, as compared to S$246m in Aug 2013 and S$342m in May 2014. It continues to receive active and positive tender enquires. We will provide more details after the analyst briefing. For now, we place our Buy rating and S$0.47 fair value estimate under review.

Source: OCBC Research - 15 Aug 2014