Summary: Bright World Precision Machinery (BWPM) posted an impressive set of 3Q06 results, as earnings surged 77.2% YoY to RMB40.1m on the back of a 56.4% jump in revenue to RMB129.5m, even after accounting for a tax expense of RMB5.7m (versus none a year ago). On a sequential basis, revenue rose 13.2%, while earnings jumped 65.9%, as BWPM's measures to contain its costs appear to be working, with operating expenses down 28.6% to RMB8.9m. It is also worth noting that its 3Q earnings have just managed to exceed its 1H06 earnings. Revenue for the 9-mth period came in at RMB322.3m, or about 72.1% of our FY06 forecast, while earnings of RMB80.2m is just about 66%. We are not too worried as BWPM's 2H performance was traditionally stronger than 1H on a 60:40 basis. Going forward, BWPM remains positive about the outlook of the manufacturing sector in China, especially the stamping industry, given the stellar growth in the automobile manufacturing industry. Pending our meeting with the management later, we maintain our BUY rating and our DCF-based fair value of S$0.60..
Q3表现不错，9month net profit grows 36.2%。。gross margin and profit margin也比较稳定。。假设Q4和Q3一样，现在股价0.42, 仅仅trading在PE=7.02，对于一个还在增涨的公司来说，很低了. 假设trading在PE=10，那fair price should be 0.595.。。 vested.
