SVI

Shifting into turbo from mid-2013 BUY

SVI Plc

Key takeaways from analyst meeting: Five new clients to boost sales from

3Q13F. SVI has added five new clients and these are expected to drive sales

significantly from 3Q13F. Management expects 21percent sales growth to US$300mn (same

as SCBS) with medical products and communication component products (CCP) as

major drivers. According to management, CCP is likely to become its fourth big

segment, adding to the three original segments of industrial control, medical and

niche products.

2013F core to recover by 95% to Bt751mn. Despite an unexciting 1H13F, as new

products have not yet taken off, we expect 2013F core profit to recover strongly by 95%

to Bt751mn off the low base created by the floods in 2012A. Although SVI lost one

client with the floods, this is being more than compensated for by several new clients.

In addition, we expect it to book at least Bt1.4bn in final insurance claims in 2013F,

which will raise net profit to Bt2.2bn.

2014F to grow 25% plus two upsides. Backed by new clients and the new CCP

segment, management expects 25-30percent sales growth in 2014F (vs. SCBS 22%, raised

from previous assumption of 15%). We forecast 25% earnings growth to Bt945mn in

2013F (upgraded by 10%). This excludes two big upsides: 1) the revisit of a planned M&A

- after the company receives its final insurance claim, management says it is looking at

the purchase of an EMS company in Europe to expand its client base and segments,

2) a new product that it has been working on that will be its fifth segment with a very

big client; this could be concluded by end-2013, with sizable contribution from 2Q14.

Upgrade to Buy and Bt5 TP. The high earnings growth of 25% in 2014F plus upsides

urge us to raise SVI PE to 13x (+0.5SD industry ten-year average) from 11x. This raises

TP to Bt5 from Bt4.1. Given the expected total return of 18% (based on 5.6% 2013F

dividend yield and 12.6% upside to new TP), we raise our rating to Buy from Neutral.