KUALA LUMPUR (May 27): Hong Leong IB Research says that JCY International Bhd is a major beneficiary of stronger US dollar (as almost 100% of its products are sold in US dollar while an estimated 50% of production cost is in ringgit).
JCY is one of the biggest hard disk drive (HDD) components suppliers in world.
It supplies to two of the world’s largest OEMs in the HDD market, namely Western Digital and Seagate.
In a note today, HLIB Research said JCY was trading at compelling 7.6x P/E annualised 1HFY15 EPS of 9.8 sen (versus 5-year historical average P/E of 15x), supported by a decent yield of 3.4% in 1HFY15 and a net cash position of RM225 million (15% of market capitalization or 11 sen net cash/share).
“It is building base at 70 sen-72 sen. A decisive breakout above 77 sen will spur prices higher towards 81.5 sen-90 sen zones. Cut loss below 68 sen,” it said.