ECS ... Sep12

ECS is currently addressing this low liquidity issue, which could be an immediate catalyst. The group has a strong balance sheet as of Q212 with high net cash/share of RM0.76, zero gearing, strong reserves of RM90.9mil which is equivalent to three times the FY11 net profit.

ECS has started to sell YTL's 4G phone via its distribution channels a few months ago prior to Aug 2012. Management has lately cooperated with Huawei , China 's biggest smartphone markers, to launch its latest model Ascend P1 in Malaysia to further widen its revenue stream.

Going forward, ECS plans to distribute more smartphone brands/model when its smartphone distribution channel becomes larger and more scalable in the market.

Enterprise Systems segment expected to improve in H212. The division has recorded a flat year-on-year growth in H112 due mainly to the softening demand from small and medium enterprises and government spending as a result of seasonality and the uncertainty of the general election timing.

Despite the sluggish performance in the first half of 2012, management remains positive on the segment due to more products/brands launching, increasing enterprise system awareness and seasonality factors.