www.dbsvickers.com

S$0.255

FY06 Below

expectation

Buy

(Maintain)

FY07F: Unchg

FY08F: Unchg

S$0.37

(Prev: Unchg)

GTC SP

S$262.5m

US$171.2m

07 ?7.0x

08 ? 6.6x

07 ?0.9x

08 ?0.8x

Comment on Results Outlook Recommendation

Global Testing reported results that were

about 9% below our expectations due to

slower quarterly sales and higher than

expected forex losses. Sales were within

our expectations and Group?s earlier

guidance of 5% and 10% q-o-q decline.

Depreciation expenses increased 34%

which affected gross margins when

utilization fell below expectations in

4Q06. The drop in ASP in 4Q06 and the

tepid demand lead to the weak

profitability during the quarter. 4Q06 net

profit declined 55% qoq and 65% yoy. For

the full year, sales increased 33.5% while

net profit increased 15%

In the current quarter, Global

Testing expects sales to decline

18% to 22% over 4Q06 due to the

current weak market demand and

the shorter working period during

the quarter as a result of the

Chinese Spring Festival. As a result,

we estimate Global Test will report

a loss of between US$1m to US$3m.

Sales 17.4 18.8 17.0 -2% -10% Slower qoq and yoy sales due to the ongoing semiconductor inventory

correction by its key customers.

Gross Profit 9.7 8.7 5.3 -46% -40% Negative operating leverage effects as higher depreciation expenses were

incurred from the new capacity added during the year

EBIT 7.6 7.4 2.6 -66% -65% Incurred a forex loss in 4Q06 compared to forex gains in both 3Q06 and

4Q05

EI 0.0 0.0 0.0 nm nm

Pretax 7.3 7.1 2.2 -69% -68%Slower qoq and yoy sales due to the ongoing semiconductor inventory

correction by its key customers.

Gross Profit 9.7 8.7 5.3 -46% -40% Negative operating leverage effects as higher depreciation expenses were

incurred from the new capacity added during the year

EBIT 7.6 7.4 2.6 -66% -65% Incurred a forex loss in 4Q06 compared to forex gains in both 3Q06 and

4Q05

EI 0.0 0.0 0.0 nm nm

Pretax 7.3 7.1 2.2 -69% -68%-46% -40% Negative operating leverage effects as higher depreciation expenses were

incurred from the new capacity added during the year

EBIT 7.6 7.4 2.6 -66% -65% Incurred a forex loss in 4Q06 compared to forex gains in both 3Q06 and

4Q05

EI 0.0 0.0 0.0 nm nm

Pretax 7.3 7.1 2.2 -69% -68%-66% -65% Incurred a forex loss in 4Q06 compared to forex gains in both 3Q06 and

4Q05

EI 0.0 0.0 0.0 nm nm

Pretax 7.3 7.1 2.2 -69% -68%-69% -68%

Net Profit 7.4 5.8 2.6 -65% -55%-65% -55%

EPS (S cts) 1.07 0.85 0.38 -65% -55%-65% -55%