Hi-P International core profit dropped 21% to $10.6m

Despite sales jumping 13%.

According to DBS, Hi-P International's core profit of S$10.6m (+441% y-o-y, -21% qo-q) was in line with its S$11m forecast. 

Sales grew 13% y-o-y to S$285m on increased orders, mainly driven by wireless customers including Apple, Motorola and Blackberry. We believe sales growth would have been stronger if not for Blackberry’s weaker than expected shipment. Core operating margin was a tad weaker at 3.7% vs 5% in 1Q13 due to upfront cost incurred for new products to be introduced in 2H13.

Here's more:

Stronger 2H13 driven by upcoming slew of new phones/tablets. Hi-P has guided for 2H>1H. We believe this is on the back of new wireless models such as the new Blackberry 10 line of phones, iPhone 5S/6 and Motorola X.

Tablets wise, there is speculation that iPad 5 and an upgraded Kindle will hit the market.

Although the degree of engagement varies, Hi-P is poised to benefit from these new products. For 2H13, we forecast net profit of S$29m (+57% h-o-h), but  lower margins because of more assembly work.