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Politics : Formerly About Applied Materials

AMAT 285.11

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12:39 PM EST

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To: StanX Long who wrote (58406)	1/4/2002 5:34:14 AM
From: StanX Long	of 70976

Friday January 4, 5:09 PM Singapore Technology Stocks (Buy) - A modest recovery in IT spending expected, December 01 Purchasing Managers’ Index (PMI), Natsteel Ltd (BUY – Upgra By Lim Fang Yih, Pu Weidong, Xie dahong, Joseph Yap sg.biz.yahoo.com Singapore Technology Stocks (Buy) A modest recovery in IT spending expected Details · International Data Corp (IDC) expects a modest recovery in IT spending by mid-2002. It is predicting that IT spending in 2002 will increase 4-to-6% in the US, while growing 6-to-7% in Western Europe and 10-to-12% in the Asia Pacific region. Impact · We believe IT recovery will benefit local tech stocks. Our top picks are: Price Prospective P/BV Market Cap EPS PER Electronics contract manufacturers: Beyonics 0.23 0.018 12.8 1.6 197.7 Ionics 0.305 0.021 14.5 2.2 190.3 Natsteel (Singapore: NATS_p.SI - news) Broadway 2.42 0.176 13.8 2.4 489.3 PCI 0.67 0.05 13.4 2.4 129.0 SMT 0.46 0.026 17.7 2.2 112.3 Venture (Singapore: VENM.SI - news) 14.1 0.51 27.6 6.2 3258.6 PC related companies: Creative 15.5 107 14.5 1.8 1161.9 GES (Digiland) 0.645 0.036 17.9 1.4 460.5 ECS 0.685 0.057 12.0 3.0 200.7 TPV 0.62 0.06 10.3 2.9 744.0 Elec & Eltek (US) 3.16 0.26 12.1 2.2 461.0 Lafe Tech (Singapore: LAFE.SI - news) 0.2 0.44 4.5 1.2 200.0 December 01 Purchasing Managers Index (PMI) · Dec PMI rose 2.4pts to 48.3 (vs 45.9 in Nov) and signaled a recovery in the manufacturing sector. The increase in the overall PMI was due to the improvements in new orders and production output. A PMI index above 50 indicates an expansion. · New export orders rose 1.7pts for the second straight month to 51.0 and confirm the export demand has picked up. · Electronics index rose 2.9pts to 49.4 with electronics production index rose to 52.4 and implies a recovery in electronic production. · The latest numbers point to a recovery in global electronics demand. This is positive for Singapore as electronics accounted for half of total industrial production. · We expect overall PMI to continue on the recovery trend in the coming months and be above 50pts in the 2Q. Industrial production is expected to resume positive growth in the 3Q. Natsteel Ltd (Singapore: NATS.SI - news) (BUY Upgrade) NATS SP S$0.92 A Recovery Story · Natsteel is worth a second look for three reasons. · Firstly, the stock is trading at bombed out valuation of 64% discount to RNAV of S$2.54. It is also below book value of S$2.50. · Secondly, we believe there is opportunity for the Group to declare special dividend to return excess cash to shareholders. · Thirdly, the stock price has already reflected the expected weak result in FY01. With market expectation currently low, we see room for surprises as the economic cycle turns upward. · Upgrade to BUY

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