Maybank Kim Eng is maintaining Sarine Technologies at “buy” with $1.94 target price for recovery of its business and long-term adoption of the technology although market needs to see more evidence of this.
In a Monday note, analyst Yeak Chee Keong says Sarine’s business has continued to recover in 1Q16 as net profit surged 240% to US$3 million ($4.1 million) but was below its US$4-5 million expectation.
Sarine sold 18 Galaxy systems in the quarter, bringing the installed base to 233. Recurring revenue accounted for 40% of total revenue and grew 30% on quarter. This was driven by factors including renewed manufacturer profitability, improved demand and inventory restocking.
But after a strong 1Q, Yeak sees strong demand of rough diamond market compared to mixed demand in the polished diamond markets due to seasonality and because supply had built up during robust 1Q production.
“US consumer demand is steady but the Far East and European markets are more restrained,” says Yeak.
But Sarine said even after industry restocking, inventories are still below 2014 peak and manufacturers are prudent not to overstock.
“We will watch for short-term data points from DeBeers Sights , JCK Las Vegas trade show and Hong Kong Jewellery & Gem fair for further confirmation,” adds Yeak.
At 9.40am, Sarine Tech is down 0.86% at $1.72.
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In a Monday note, analyst Yeak Chee Keong says Sarine’s business has continued to recover in 1Q16 as net profit surged 240% to US$3 million ($4.1 million) but was below its US$4-5 million expectation.
Sarine sold 18 Galaxy systems in the quarter, bringing the installed base to 233. Recurring revenue accounted for 40% of total revenue and grew 30% on quarter. This was driven by factors including renewed manufacturer profitability, improved demand and inventory restocking.
But after a strong 1Q, Yeak sees strong demand of rough diamond market compared to mixed demand in the polished diamond markets due to seasonality and because supply had built up during robust 1Q production.
“US consumer demand is steady but the Far East and European markets are more restrained,” says Yeak.
But Sarine said even after industry restocking, inventories are still below 2014 peak and manufacturers are prudent not to overstock.
“We will watch for short-term data points from DeBeers Sights , JCK Las Vegas trade show and Hong Kong Jewellery & Gem fair for further confirmation,” adds Yeak.
At 9.40am, Sarine Tech is down 0.86% at $1.72.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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