Thursday, October 20, 2011

JCY continues to chalk up gains

KUALA LUMPUR: JCY International Bhd shares continued to be actively traded on Thursday, Oct 20 as investors viewed the hard disk drive''manufacturer'' as less affected from the severe flooding in Thailand which had impacted other players.

At 9.40am, JCY rose 2.5 sen to 60.5 sen with 21.79 million shares done.

The floods in Thailand have forced the shutdown of the facilities some of the Malaysian HDD makers with operations in that country.

An analyst with MIDF Research on Wednesday said while JCY's plant located in Saraburi, Thailand was also affected, it was possible that the impact was not as significant.

'Looking at their latest quarterly result, Malaysia accounts for 76% of its revenue, while the rest are lumped together as others and individually fall below the 10% threshold of a reportable segment.

'So with the flooding in Thailand affecting HDD makers there, it could redirect some of the demand towards Malaysia based manufacturer such as JCY to fill in the gap,' he said.

Meanwhile, CIMB Research on Oct 20 downgraded the stock to Trading Sell and said that while JCY's Thai plant is, unlike most of its rivals, unaffected by the flood, a concern was the potential negative impact of a drop in orders from its two HDD customers, WD and Seagate, especially if the halt in production is protracted.

'JCY's share price may have reacted positively to news that it could benefit from its competitors' woes due to the flood in Thailand.

'Investors should take advantage of the recent share price spike to take profits. We downgrade the stock to Trading Sell,' said CIMB Research.

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