Posted by HC Lee > 2014-04-10 09:12 | Report Abuse

Trappppppppp

Posted by zack_liza > 2014-04-10 09:14 | Report Abuse

still can collect 0.75 and below..TP 0.80, 0.90 and 1.00 and above...

Posted by HC Lee > 2014-04-10 12:26 | Report Abuse

zzzzzzzzzz

Posted by jeloft > 2014-04-10 12:28 | Report Abuse

hope that the 2Q performance same like or even better than 1Q

Posted by HC Lee > 2014-04-14 11:47 | Report Abuse

Follow big brother again...

Posted by yhtay2k > 2014-04-14 18:20 | Report Abuse

Laggard in the rally

Posted by johnny cash > 2014-04-14 22:38 | Report Abuse

Expecting a strong comeback

JCY is showing signs of a recovery following the strong earnings
recorded in 1QFY14 on the back of higher sales and better operational
efficiencies. We expect stronger HDD demand growth from the
enterprise segment, a weaker competitive environment and a potential
entry into the tablet market to drive JCY’s earnings recovery.

We expect its valuation to remain
attractive due to a strong earnings
recovery over the next two years. In
our estimation, JCY currently trades
at 8.7x CY15 P/E, which is a 30%
discount to its peers and a 23%
discount to HDD manufacturers and
OEMs. Applying a blended multiple
method, we get a valuation range of
RM0.99 to RM1.07 which indicates a
decent 31-42% upside. Our stance on
the stock is mainly trading-oriented.
A proxy to big data and
cloud computing growth
Most industry research groups
expect HDD demand to grow by a
modest 2.9-5.6% CAGR over 2013-18,
driven by strong growth from the
enterprise segment with an emphasis
on big data and cloud storage. We
see strong growth from the
enterprise segment providing an
attractive opportunity for JCY to
grow its exposure in cloud storage
and move away from the declining
PC market. We also think that JCY
may finally have exposure in the
tablet market given the development -------continue

Posted by johnny cash > 2014-04-14 22:41 | Report Abuse

of ultrathin drives in the storage
industry.
Consolidation to aid margin
expansion
We expect that there could be a
round of consolidation among the
HDD component manufacturers to
grow the industry‟s profitability
given that some of its peers are still
struggling to recover from the
devastating floods in Thailand.
Considering its strong balance sheet,
prudent cash management and years
of experience, we expect it to take
advantage of potential M&A activity
to increase its allocation from WD
and Seagate and grow its margin
from better economies of scale.
Time to take another look
We think that JCY is already showing
signs of a recovery given the strong
earnings performance in 1QFY14.
Moreover, we do not see SSD as a
structural threat to HDD given the
shift in consumer demand towards
mobile and cloud computing. Hence,
we think that JCY‟s prospects of a
recovery could not be better.

Posted by johnny cash > 2014-04-14 22:42 |

Post removed.Why?

Posted by johnny cash > 2014-04-14 22:42 | Report Abuse

JCY suffered a slump in earnings between Sep 12 to Sep 13 due to the weakness
in HDD demand following the shift in consumer preference towards mobile
devices such as smartphones and tablets, which led to a decline in PC shipment
volumes. According to the industry research group, Trendfocus, global HDD
shipments in 2013 fell by about 4.4% yoy from 577m units in 2012 to 552m
units in 2013. Meanwhile, Gartner reported that global PC (desktop and
notebook) shipments fell by 12.3% yoy from 341m units in 2012 to 299m units
in 2013.
However, it is interesting to highlight that the overall decline in the HDD
market was relatively smaller compared to the decline in PC shipments. We
believe that this was due to the increasing demand from the enterprise and
mobile HDD segments which helped to cushion the softness in PC demand. We
expect the trend to persist as the demand from the enterprise segment will
drive HDD shipments as PC remains a drag.
Furthermore, we expect the weakness in HDD shipments to bottom out given
the improving demand in 2H13. Global HDD shipments in 4Q13 actually grew
by 4.7% yoy and 1.4% qoq. The better-than-expected growth was due to higher
shipment volumes from the mobile segment which grew from 67m to 72m
(+7.5% yoy) and the enterprise segment which grew from 14m to 17m (+21%
yoy). Moreover, the preliminary data from Trendfocus also showed that HDD
shipments in 1Q14 were hovering around 136m units, which was relatively flat
yoy.

Posted by johnny cash > 2014-04-14 22:42 | Report Abuse

1.2 Earnings are improving
Following the improvement in industry demand, we saw JCY‟s earnings
gradually improved in the last quarter. 1QFY14 sales grew by 27% yoy to
RM477m from RM377m in 1QFY13, driven by a combination of higher
shipment volumes, higher ASP and favourable exchange rates. EBITDA margin
improved significantly to 13.9% in 1QFY14 vs. a 1.7% declined in 1QFY13 due to
better sales and improving operational efficiencies. As a result of its high
operating leverage, JCY recorded a significantly higher core net profit of
RM38.9m in 1QFY14 vs. a RM32.7m core net loss in 1QFY13. The company
declared an interim dividend of 1 sen during the quarter. We expect JCY‟s
earnings to rebound strongly on the back of the improving industry demand,
weakening competitive environment and better operational efficiency.

Posted by johnny cash > 2014-04-14 22:43 | Report Abuse

1.3 Share price remains a laggard
JCY‟s share price was up by 15% since Jan 12, but it is still significantly lower
relative to its customers which have been enjoying tremendous share price
growth in the last 15 months. WD and Seagate, which are estimated to control
about 80-85% of the global HDD market, have been growing at a whopping
211% and 181%, respectively. Meanwhile, Nidec, which is the world‟s largest
HDD motor base assembly manufacturer, is the best performer among HDD

Posted by johnny cash > 2014-04-14 22:43 | Report Abuse

component manufacturers which have enjoyed 237% share price growth over
the same period.
YTD, Nidec continues to lead with 15% growth, followed by JCY with 13%. In
the meantime, there are mixed performances between the HDD OEMs; WD was
up by 7% while Seagate fell by 2%.

Posted by johnny cash > 2014-04-14 22:44 | Report Abuse

2. OUTLOOK
2.1 Recovery in industry demand
We believe that JCY stands to benefit from a recovery in HDD industry demand
on the back of enterprise storage growth from “big data” and cloud computing,
pent-up demand from gaming consoles and potential exposure to the tablet
segment from ultrathin drives.
Gartner expects global HDD shipments to grow at a modest five-year CAGR of
2.9% from 552m units in 2013 to 635m units in 2018, driven by the increasing
demand for digital data storage despite the sluggish demand for PCs.
 The positive growth is expected to come from robust enterprise storage
demand which is forecast to grow at a 2013-18 CAGR of 25%.
 However, the slowdown in the PC segment is likely to persist with a
decline of 7% in CAGR during the period.
 Nonetheless, the demand for storage will continue to drive industry
growth as Gartner estimates that the average capacity for disk drives
will increase from approximately 2.1TBs in 2013 to 2.69TBs in 2014
(+28% yoy).
Meanwhile, Coughlin Associates, a storage industry consultant group, is also
expecting the decline in HDD shipments to ease and could potentially reverse
as early as 2014. The group expects HDD shipment volumes to grow by a higher
2013-18 CAGR of 5.6% on the back of rising demand from cloud storage and
consumer electronics.

Posted by johnny cash > 2014-04-14 22:45 | Report Abuse

Big data and cloud computing are driving storage demand. Gartner
defines “big data‟‟ as high volume, high velocity and high variety information
assets that demand cost-effective, innovative forms of information processing
for enhanced insight and decision making. The big data phenomenon has
enabled organisations to perform analyses with higher accuracy for a better
decision making process. The industry research group, International Data Corp
(IDC), forecast the big data market to grow by 30% in 2014, exceeding the
US$14bn mark as demand for big data analytics skills continue to outstrip
supply. Cloud computing is a prime beneficiary of the surge in demand for big
data given that the agile nature, flexibility and highly scalable storage make it
an appealing solution for big data.
According to Cisco, the global cloud traffic volume is expected to increase by
more than 3x in 2017, driven by consumer traffic which is projected to grow at a
2012-17 CAGR of 36% to 4,300 exabyte (EB) from 1,400 EB currently (1
exabyte is equivalent to 1bn gigabytes). The strong growth will be coming from
applications such as video and audio streaming that are strong contributors to
cloud traffic growth. Moreover, the proliferation of mobile devices such as
smartphones and tablets, which have been traditionally constrained by limited
storage space, has created a huge demand for personal remote storage such as
iCloud, Dropbox, SkyDrive and Google Drive. Cisco forecasts personal cloud
traffic to increase from 1.7 EB in 2012 to 20 EB in 2017. Overall, we expect the
robust growth in cloud storage to continue to spur further demand for HDD.

Posted by johnny cash > 2014-04-14 22:45 | Report Abuse

Potential from gaming consoles. In addition, we also expect HDD demand
from the gaming segment to increase on the back of new gaming consoles such
as Microsoft‟s „Xbox One‟ and Sony‟s „PlayStation 4‟ that were released at the
end of 2013. According to the latest data from the market research firm, NPD
Group, hardware sales in Feb grew by 42% yoy from US$244m in Feb 13 to
US$347m in Feb 14, which indicates that the demand for these consoles is still
strong. Gartner forecasts global video game console sales to grow from
US$44bn in 2013 to US$55bn in 2015, which is at a two-year CAGR of 11%.

Posted by johnny cash > 2014-04-14 22:46 | Report Abuse

Moreover, we see the recent decision by China to lift its 14-year-old video game
console ban as a positive catalyst for HDD demand. Although it is still early
days before these gaming consoles penetrate the China market in bigger way,
we are encouraged by the growth potential given that Huawei had earlier
reported that there are about 400m people who play video games in China even
though the majority of that population account for online PC games. Based on
our recent meeting, JCY expects orders from the gaming console segment to
pick up in 2H14.
Ultrathin HDD opening up opportunities in the tablet market.
Following the increasing popularity of mobile devices such as tablets, there are
several developments in storage technology to address the demand for bigger
storage capacity for tablets. One of them is the ultra mobile 5mm HDD which
was announced by Seagate at the end of last year. The ultrathin HDD was
specifically designed in a 5mm form factor for the tablet market. We think that
the new product development could potentially mark a new end market for
HDD. We see the development positively as it offers JCY exposure to the
growing tablet market. We expect further margin expansion if the company is
able to gain traction from the tablet segment given that these ultrathin drives
generally command higher margins than its conventional hard drives.

Posted by johnny cash > 2014-04-14 22:46 | Report Abuse

Exciting future in storage technology. We think that the new
developments within storage technology are embracing the shift in consumer
demand and will propel the industry towards stronger growth. For example:
 Hybrid drives
A hybrid drive is a storage device that combines the NAND flash solid state
drive (SSD) with HDD technology. It offers better speed performance at the
cost-effective storage capacity of traditional HDDs. Seagate highlighted that
hybrid drive performance is closing the speed gap between HDD and SSD. For
example, on average it took a start-up time of about 37 sec using HDD-based
PCs, while SSD-based PCs cut that start-up time significantly to 20 sec.
However, with hybrid drives, the start-up time is reduced considerably to 22
sec, or 40% faster than traditional HDD. Apart from a faster processing
performance compared to HDD, hybrid drives cost much less relative to SSD.
Based on our survey from the online retailer, Newegg, we found that hybrid
drives are 5-6x cheaper relative to SSD prices. We think that with a competitive
pricing strategy, hybrid drives could potentially drive down tablet and
ultrabook prices. Hence, this could lead to higher hybrid drive shipment
volumes.

Posted by johnny cash > 2014-04-14 22:47 |

Post removed.Why?

Posted by johnny cash > 2014-04-14 22:47 | Report Abuse

PC remains a drag, but shipments decline is easing. Gartner reported
that global PC shipments in 1Q14 fell by 1.7% yoy, which indicates an easing in
the severity compared to the past seven quarters. Gartner highlighted that
although PC market remains weak, it is showing signs of improvement
compared to last year that was partly helped by Microsoft decision to end the
Windows XP support on April 8. This has forced businesses and enterprise to
accelerate the PC refresh cycle. Despite the weakness in PC market, all of the
top five PC vendors recorded a shipments growth compared to last year. Lenovo,
which is the biggest PC vendor in the world, recorded 10.9%yoy shipments
growth driven by positive demand in all region except for Asia Pacific due to
slowdown in China and longer holidays during the quarter.

Posted by johnny cash > 2014-04-14 22:48 | Report Abuse

2.2 HDD industry consolidation could lead to better margin
We expect another round of consolidation among the HDD component
manufacturers given the challenging operating environment. Based on our
observation, there are several HDD component manufacturers that are still
struggling to recover from the devastating floods in Thailand in 2011, while
some have already left the market due to high reinvestment costs. Moreover,
some of the remaining component manufacturers are also having operational
issues as a result of the stringent quality requirements of HDD OEMs. The
sluggish industry demand in 2013 also made the recovery even tougher. Since
JCY was not impacted by the 2011 floods, we believe that it should benefit from
any potential industry consolidation, given its size and financial strength.
Size matters. Based on information gathered from listed HDD component
manufacturers, we understand that JCY is one of the biggest HDD component
manufacturers globally in terms of production volume. By market share, JCY is
one of the leading suppliers of base plates, top covers, antidiscs and actuators in
the world. We estimate that JCY currently has a market share of about 20-30%
for each of the HDD components that it manufactures.
JCY highlighted that it is one of the three major base plate producers, besides
MMI and Nidec. These producers control about 70-75% of the global base plate
volume. JCY supplies more than 60% of WD‟s base plates and about 10-20% of
Seagate‟s base plate requirements. For top covers, JCY is one of top three major
manufacturers that hold a combined market share of 80-85%, with the other
major players being Metal Form and Supernova. We estimate that JCY has
about 20-25% (vs. 14-16% previously) of the global market and supplying more
than 50% of WD‟s requirements. Meanwhile for antidiscs, we understand that
JCY is among the top two major suppliers left in this market, alongside Cheung
Woh. Both companies are estimated to have a combined market share of
around 60%. Finally, for actuators, JCY forecast that there are only three major
manufacturers, namely JCY, Belton and Compact, left in this segment – these
three players are estimated to have about 80-85% of the global actuator
production volume.

Posted by johnny cash > 2014-04-14 22:48 | Report Abuse

Ability to supply multi-HDD components and offer vertical
integration. One of the key strengths of JCY is its ability to supply multi-
components in huge volumes to customers. Moreover, JCY‟s manufacturing
facilities share common material planning and system integration, and this
gives JCY better control of the quality of its components. More importantly, this
can reduce the lead time, which allows the OEM to shorten the time-to-market
for its products. Therefore, we think that any potential consolidation in the
industry could provide the opportunity for JCY to clinch greater allocation and
volume.
Worst is over. Considering that JCY is sitting on a net cash position of
RM127m and free cashflow of about RM200m, we expect JCY to take advantage
of the challenging situation confronting some of its troubled peers in seeking
potential acquisition targets in order to grow and achieve better economies of
scale. Therefore we think the worst is over for JCY and it will maintain its
position as a leading HDD mechanical components manufacturer.
2.3 Easing in ASP pressure
Based on the historical earnings performance, we saw that JCY‟s end customers,
WD and Seagate have been enjoying steady margin expansion over the last four
quarters despite lower global HDD shipment volumes. The margin expansion is
expected to continue in 2014.

Posted by johnny cash > 2014-04-14 22:49 | Report Abuse

We think the stronger margin trends enjoyed by WD and Seagate are mainly
due to higher average selling prices (ASP). This was supported by Trendfocus
which highlighted that retail HDD selling prices are still above the levels before
the 2011 flood in Thailand. Trendfocus expects ASPs to remain flat in 2014 due
to the limited incentives for WD and Seagate to engage in a price war given that
both companies are still seeing orders come in despite the higher ASP. Hence,
we actually see this as positive for JCY because it helps to ease the ASP erosion.
Meanwhile, we expect its ongoing investment in automation and quality
improvement to yield better operational efficiencies and higher operating
leverage.

Posted by johnny cash > 2014-04-14 22:49 | Report Abuse

3. RISKS
3.1 Structural threat from SSD
There are concerns in the industry regarding the competition from SSD as a
potential storage solution replacement for HDD given its high speed
performance and durability advantage. However, we do not think that SSD will
replace HDD given the lack of NAND industry capacity to cater to the global
storage demand. For example, Gartner reported that the HDD industry
delivered about 66.5 EB to businesses in 2012, compared to 1.8 EB enterprise
grade server and storage SSD. Gartner also estimated that it would take
US$210bn in fabrication investments to displace 15% of the demand for drives
in 2014.
Seagate highlighted that a new hard drive production facility would cost about
US$35m-50m and can be operational in about four months. However, a similar
NAND flash factory that produces 100,000 wafers per month costs about
US$4bn and takes about two years to build. Thus, we think that the higher cost
barrier will deter SSD from replacing HDD as the main storage solution.
3.2 Rising cost of raw materials
The cost and availability of certain raw materials used to manufacture HDD
components are critical to JCY‟s performance. A potential increase in raw
materials such as stainless steel and aluminium could impact JCY negatively
due to higher costs and lower operating margins if the company is unable to
transfer the increment to its customers.
3.3 Foreign exchange exposure
A weaker US$ would impact JCY negatively given that the bulk of its operating
expenses are in ringgit. However, in terms of raw materials, the company is
naturally hedged given that almost all of its purchases are in US$ against 100%
of its sales.

Posted by johnny cash > 2014-04-14 22:50 | Report Abuse

4. FINANCIALS
4.1 Profits set to rebound strongly in FY14
We expect FY14 to be a better year for JCY as the company is poised to ride on
the demand growth in the enterprise and mobile segments within the HDD
sector. We are projecting full-year sales of RM1.8bn with a core net profit of
RM153m (FY14-16 CAGR of 10%), which is a significant jump from the
RM70.4m core net loss recorded in FY13. However, we believe that this can be
achieved, driven by higher HDD shipment volumes, the increasing allocation of
orders from WD and Seagate and the potential expansion in product lines. The
stronger growth in profitability is due to economies of scale and improving
operational efficiencies.
Strong balance sheet and cashflow to support its dividend plan. JCY
has a strong balance sheet position with net cash of RM127m as at Dec 13 as the
company has been prudent in spending and mainly focused on automation
processes to increase its operational efficiency. In addition, JCY‟s free cashflow
operation stands at RM200m as at FY13. We think that this should enable JCY
to maintain its plans of paying out as much as 50% of its net profits in
dividends. Based on our 50% payout assumption, the dividend yield is
estimated to be between 5% and 6.3% for FY14-16.
Improving debtor days, meanwhile credit turnover remains stable.
JCY‟s average receivable days have been improving tremendously over the last
two years from 67 days in FY12 to 51 days in FY13. In general, we expect the
collection days to remain stable as customers typically pay within a 60-day
period. Meanwhile, its payable days remain stable, ranging from 56 days to 58
days over the last three years. However, its average inventory has been trending
up given the lower-than-expected demand following the recovery from the
floods in 2011.

Posted by johnny cash > 2014-04-14 22:50 |

Post removed.Why?

Posted by johnny cash > 2014-04-14 22:50 |

Post removed.Why?

Posted by lohman > 2014-04-15 09:09 | Report Abuse

jcash; Tks for putting up the interesting report ; it has valid points. Can you provide the source? Few research houses cover JCY. Its financial performance is too volatile and unpredictable, ditto for its share price. Most analysts can't get it right, they are well behind the curve. I believe it 's currently a good trading buy with recovering profitability FY2014.

Posted by HC Lee > 2014-04-15 11:13 | Report Abuse

BUY

Posted by sage > 2014-04-15 15:31 | Report Abuse

That is a CIMB report.

https://cimbequityresearch.cimb.com/EFAOnTheWeb/EFAWebAPI/GetDocPDF.asp?DocGUID=58E6545D-A250-4E47-8908-ECF92948E93F&A=CIMB

Posted by HC Lee > 2014-04-15 15:41 | Report Abuse

Good detail reports...institutions wud love it. Currently still undervalued

Posted by sage > 2014-04-15 15:47 | Report Abuse

Probably the most detailed and comprehensive I have seen.

Posted by zack_liza > 2014-04-16 09:06 | Report Abuse

continue up trend,still can buy 0.80 and below..TP price 0.90, next TP 1.00 and above for this year...first Qtr profit 30mil, second qtr confirm profit...buy now before price jump 1.00 and above..

Posted by Tipper > 2014-04-16 09:52 | Report Abuse

Strong sentiment picking up in line with strong fundamentals!

Posted by HC Lee > 2014-04-16 11:37 | Report Abuse

Wait for the quarterly report...results will be a strong one.

Posted by johnny cash > 2014-04-16 14:42 | Report Abuse

JCY International -----------------------------15//04//14
(JCYH MK)
Technical BUY with +16.6% potential return
Last price : RM0.755
Target Price : RM0.790, RM0.880
Support : RM0.715
Stop-loss: RM0.710
BUY with a target price of RM0.880 with a stop
loss placed below RM0.710. Following a
breakout above the cloud on 30 Dec 13,
JCYH’s share price has continued to climb
higher along the rising trendline. Rebounding
from the recent low RM0.715, JCYH has
successfully closed above both the 10-day and
21-day SMA lines, and is thus likely to trend
higher. Given the higher trading volume of
13.2m shares recorded yesterday (vs 20-day
average of 3.6m), we expect buying interest, in
tandem with the surging momentum, to push
the share price higher in the near term. A
positive closing above the immediate
resistance of RM0.790 may trigger more
buying interest and catapult the share price
toward our medium-term target at the 1.38x
Fibonacci extension level of RM0.880.

Posted by dyks1 > 2014-04-18 11:36 | Report Abuse

It's going to rise soon as their customer WD share price have double indicating that HDD market growing fast again.

Posted by rajaumnok > 2014-04-18 13:13 | Report Abuse

afternoon session sure goreng

Posted by rajaumnok > 2014-04-20 14:08 | Report Abuse

buy as we might see it moving up tomorrow.

Posted by rajaumnok > 2014-04-21 13:56 | Report Abuse

someone is purposely push down the price with a few lots each time so that he can collect, so be prepared for the price increase.

Posted by LionKing888 > 2014-04-22 15:22 | Report Abuse

collect when it drop now. grab the chance to enter

Posted by chenhangtee > 2014-04-22 22:04 | Report Abuse

What happened ? Drop 2 sen today. Hope recover soon.....

Posted by HC Lee > 2014-04-22 22:32 | Report Abuse

Last Minuit push up on Monday to sell on Tuesday. Luckily didn't buy.

Posted by Tipper > 2014-04-23 14:04 | Report Abuse

No worry...it some peanut corrections.

Posted by keshminder > 2014-04-24 01:33 | Report Abuse

time to get in

Posted by HC Lee > 2014-04-24 12:17 | Report Abuse

Next qtrly report end of May...need to wait until then.

Posted by HC Lee > 2014-04-25 15:43 | Report Abuse

zzzzzzzzzz

Posted by HC Lee > 2014-04-27 10:10 | Report Abuse

Semi book to bill ration look solid for the last few months...think price will follow suit sooner or later.

Posted by chenhangtee > 2014-04-27 15:41 | Report Abuse

HC Lee, thanks for your comment. Any body have latest news about the company Q1 performance ?

Posted by Lai Yin Keat > 2014-04-29 22:50 | Report Abuse

Dark horse of the year