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I normally "trade" the opposite (through CFD) when DBSV announce any "BUY" or "HOLD". For Westcomb, they are like 50-50 accurate.
Just 2 days ago on 18 Dec, DBSV issued TOP Buy recommendation on DMX - its price then was $0.665, target price of $1.08. Now we see why seasoned investors read between the lines on analysts' recommendation.
Can buy into DMX? It is at its 52 weeks low now at $0.59
I think its on a downtrend... be cautious
Big boy is fighting here, huge buying and selling this few day...
Any comments on this counter?
DBS Group Research on 13 Nov 06
DMX Technologies
Back on track with good results
�� Story: DMX reported net profit up 13% q-o-q and 23% y-o-y
to S$4.9m, above our estimate of S$4.5m. High receivable days
at 185 days compared to 163 days in 1H06, however, are a cause
of concern for us.
�� Point: China is expected to be the most important market for
DMX, having contributed 68% of total business in 9M06. DMX
should benefit much from a fast growing broadband and digital
TV market in China and South-east Asia.
�� Relevance: We have revised FY06 and FY07 earnings by 6%
and 5% respectively. Maintain BUY at our DCF based (WACC
14% and terminal growth 1%) 1-year target price of S$1.08 that
translates to 13x FY07 PE.
Stable net margins but higher AR days. Net profit increased 23% y-o-y
to S$4.9m on account of an 18% growth in revenues and a mere 8% in
operating expenses. This despite gross margins going down by 1.7
percentage points to 25.9%. DMX efficiently managed its operating
costs well and net margins have stabilized around 11.6% in the last four
quarters. On the other hand, receivable days climbed up from 180 days
last year to 185 days for nine months of 2006. For comparisons, AR days
way 163 days for 1H06. Although management says that they have
made appropriate provisions for doubtful debts, high AR days continue
to weaken the cash flow and DMX needs to focus on bringing these
down.
Broadband and digital TV - twin engines of growth. China is the most
important market for DMX and continues to grow very fast. According
to Gartner Dataquest?s forecasts, China will add over 20m broadband
lines on top of the existing 45m lines in another three years. However,
DMX is facing increasing price competition in the broadband
infrastructure segment. Hence, it is investing aggressively in software
solutions to differentiate itself and command a price-premium in the
market. DMX is also working with both cable TV operators and TV
broadcasters on digital TV and telecom operators for IPTV on a single
solution that can target all these players. Apart from China, growth is
also expected to come from Korea, Indonesia and Malaysia.
Earnings revised upwards. We expect DMX to meet its guidance of
30% y-o-y growth in earnings for FY06, as DMX expects to secure
some new projects in Korea and Indonesia that should contribute to
the earnings in 4Q06. We have revised our earnings upwards by 6%
and 5% for FY06 and FY07 respectively on account of better earning
performance with Digital Fixed Media segment as the top driver.
However, increased working capital in receivables and higher capex
spending in buying software solutions should dilute some of the
increase in cash flow.
According to TA, this counter is either flat or downtrending.
What happen to this stock recently ? It used to be up and down together with Datacraft....But recently they are in the opposite direction ??? Moreover their recent report is positive ......Anyone can advise on this counter.....
It has secured a US$641,000 contract with Hong Kong's MTR Corp Ltd (MTRC) to strengthen the security of MTRC'S electronic information networks, DMX said. DMX will design, implement and manage the system to protect MTRC's networks.
Hi sandbox, it'll give a bounce as you can see yesterday.
Hi Nostradamus,
Will awards affect stock prices?
Thanks.
It has been awarded the Fastest Growth category by Cisco China in the recently held Cisco's Channel Partner Conference in Yunnan Province. It also won the Northern Region's award for the Best Solution category. It received this 2nd award for its innovative Cable TV solution.
Venture have yet to get approval from it board to buy over Ges for S$980 mil and if Mr Goh agree to continune to run together with Mr Daniel Yong, his deputy . Ges will have it future secure. On Dmx at today price of $0.76 and base on Ges take over model, a premium of 20%. of close to a $1/- likely scenerio few mths down the rd but anything can happen.
Read an article on Dmx in share investment weekly, Dmx might be a potential take over target by Venture given the rate that Venture is acquiring now. Reliable source says the take over price could be as high as $1. Venture might launch a surprise take over anytime. Should be a good buy below 80c now.
U r welcome, singaporegal and allantanhc.
I will short DMX next week. I expect it to drop to 50c soon!
Thanks Nostradamus. You're really a gem in this forum!
Thanks, Nostradamus. That was a very insightful analysis.
On a sequential basis, net profit was flattish. This represents a significant deceleration compared to 1Q06's net profit growth of 75% yoy as well as 2Q ended June 05's sequential growth of 63%.
2Q06 sales rose 20% yoy but was flattish qoq. In contrast, 1Q06 sales rose 80% yoy. Management attributed the weak 2Q06 results to delays in Korean and Malaysian projects, delay in 3G license issuance in China, escalating oil price and global economic uncertainties.
Operating cash flow deteriorated from US$2m in 1Q06 to only US$0.5m in 2Q06 due to higher inventory and receivable days (receivable days remained high at 165 reflecting their large exposure to the China market). This was not sufficient to cover its investment cash outflow of $11m. Nevertheless, financial position remains sound with cash of US$61m vs debts of US$8m.
Looking ahead, management maintains their target to grow sales by 30% this year, underpinned by the rollout of broadband services as well as China's migration from analog to digital TVs. But management warned that competition will remain intense, 3G licenses will not be issued till next year and start up costs in new countries may continue to impact margins.
At yesterday's closing price of , its was trading at 10x forward PER. It is fairly valued relative to its high receivable days, slowing growth rate and potential downside risks from further delay in the issuance of 3G licenses in China. Besides, its historical PE trading range is around 9-11x.