Weak showing in 1Q09. Koda Ltd (Koda) turned in a weak set of 1Q09
results that missed OCBC earnings expectations by 50%. Revenue slipped
32.5% YoY to US$11.5m while net profit plunged 77.9% YoY to US$0.4m.
EPS dropped to 0.3 US cents from 1.4 US cents a year ago. The good
news is that the group returned to profitability after momentarily suffering a
loss of US$0.5m in 4Q08. This was achieved on the back of an 11.8%
QoQ growth in sales.

Operating environment remains hazy, but company's fundamentals sound. Near term outlook for the group remains uncertain. The key concern
that Koda now faces is the lack of demand as a result of the global property
market slump, the recovery of which its fate hinges on. Fortunately, its
strong balance sheet and net cash position (US$2.6m) should enable it to
tide over the ongoing credit crunch. Its low cost production base in Vietnam
could also give it a competitive advantage over its China-based peers in
the long run.

HOLD, fair value S$0.185.