Singapore news: IT products distributor ECS up on strong Apple sales

Shares of Singapore’s ECS Holdings (ECSH.SI), which distributes iPads and iPhones in China, rose much as 2.7% on Thursday, extending gains from the previous session, on upbeat sentiment after Apple recorded blockbuster sales.

At 10:44 a.m., ECS shares were up 2.1% at $0.745 on a volume of 320,000 shares, around 1.8 times the average daily volume so far this year.

“Apple’s results were great so counters with links to Apple are lifted,” said a local trader.

 

Blockbuster sales of the iPhone and strong Asian business again helped Apple Inc (AAPL.O) crushed Wall Street’s expectations, driving its shares up to a record high.

 

OCBC has initiated coverage of ECS with a buy rating and a target price of $1.08, citing ECS’ diverse product offerings, extensive distribution channels, as well as greater penetration in higher growth markets.

 

“We expect ECS’s earnings momentum to gain traction moving forward, as it had recently clinched new distributorship agreements with Dell and also nationwide distribution rights for Apple’s iPad and iPhone in China,” OCBC said.

 

It added that ECS is set for a record year in its 2011 fiscal year, though the firm would have to depend on strong volume growth to improve profitability due to the thin margins in the distribution business.(The Edge Singapore)