from iii25 Nov 2009 12:23
Hoodless Brennan:
BlueStar SecuTech (BSST, 22.5p, £16.4m).The provider of digital video surveillance solutions in China announced its interim to 30 September 2009. Revenue for the period of RMB 67.3m (2008: RMB 80.6m). Software based revenue increased 2.8% to RMB 12.5 m (2008: RMB 12.2m). Gross Profit for the period was RMB 38.0 m (2008: RMB 40.6m), while average Gross Profit margin increased to 56.5% (2008: 50.5%) probably as a result of software mix and resultant net profit for the period was RMB 7.3 m (2008: RMB 12.6m). The company has cash at period end of RMB 49.3m (2008: RMB 67.0m).While interims are well behind the comparatives new business realisation, especially that anticipated for December means that the company is confident of achieving its revenue and profit targets for the year to March 2010. We have previously been holders at 25.5p (20/10/09) which still seems around a reasonable valuation for these shares which have since weakened. The company would be trading at 7x FY EPS of 3.7p at 25.9p. We upgrade to BUY