• We refer to our research report on Starburst titled Starburst Holdings - UOB Kay Hian 2020-11-05: Strong Turnaround Of A Niche Defence Company; Initiate Coverage With BUY”. Our BUY recommendation is now superseded by Starburst's announcement dated 15 Nov 20 relating to the Corrupt Practices Investigation Bureau’s (CPIB) investigation on the management team.
• Due to the aforementioned circumstances, we are withdrawing our recommendation for Starburst until there is more clarity on the investigation. Our recommendation is now UNDER REVIEW.

What's New

• We refer to our research report on Starburst Holdings (SGX:40D) titled “Starburst Holdings - UOB Kay Hian 2020-11-05: Strong Turnaround Of A Niche Defence Company; Initiate Coverage With BUY”.
• Our BUY recommendation for Starburst was based on:
  • turnaround of the company into profitability of S$4m in 9M20. To recap, Starburst has been in a loss-making/barely-profitable position in the last five years due to low order wins,
  • Starburst has secured several large contracts and achieved a record orderbook of close to S$60m since late-19, and
  • Starburst’s track record of close to 20 years as a specialist in the business of design, fabrication, installation and maintenance of anti-ricochet ballistic protection systems for firearms shooting ranges.
• Our recommendation, supported by the above assumptions is now superseded by Starburst's announcement dated 15 Nov 20 relating to the Corrupt Practices Investigation Bureau’s (CPIB) investigation on the management team including the Executive Chairman and Managing Director.
• Due to the aforementioned circumstances, we are withdrawing our recommendation until there is more clarity on the CPIB investigation. Our recommendation for Starburst is now UNDER REVIEW.

Source: UOB Kay Hian Research - 17 Nov 2020