STOCKS NEWS SINGAPORE-DMG downgrades Hi-P to 'sell' from 'neutral'
DMG & Partners downgraded electronics contract manufacturer Hi-P International Ltd to 'sell' from 'neutral' and cut its target price to S$0.59 from S$0.74, citing a negative impact from weaker-than-expected demand for Apple's iPhone 5.
By 0155 GMT, Hi-P shares were down 3 percent at S$0.80, but have gained 32 percent since the start of the year, compared with a 26.7 percent rise in the FTSE ST Industrials Index .
DMG slashed its 2012 and 2013 earnings estimates for Hi-P by 51 percent and 48.6 percent respectively, as it expects demand for Apple's iPhone 5 may fall "drastically" next year due to rising competition from Android and Windows phones.
"Thought to be a proxy to Apple's iPhone 5, we believed that Hi-P now has been overwhelmed by how fast things have changed in the technology industry," said DMG in a note.
Hi-P also invested S$300 million in a Chinese plant, of which a large part of the production capacity was dedicated to Apple. However, Hi-P may be hurt as Apple shifts more production back to the U.S., DMG noted.
0957 (0157 GMT)
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