Bangkok--19 Jun--Fitch Ratings Fitch Ratings has today assigned a 'BBB+(tha)' National Long-term rating and a 'F2(tha)' National Short-term rating to Thailand's SVI Public Company Limited (SVI). The Outlook on the rating is Stable. The ratings reflect SVI's strong niche position in the electronic manufacturing service industry (EMS) which focuses on the fast growing, less volatile, and higher-margin non-traditional end-product segment. The ratings also factor in strong growth prospects in the non-traditional EMS market, driven by end-market demand and an increasing trend of original equipment manufacturing (OEM) outsourcing manufacturing to EMS. The ratings are also underpinned by SVI's strong financial position, with net cash position of THB478 million and total adjusted debt to EBITDAR of 0.1x at end-2007. Despite its strong financial profile, SVI's ratings are constrained by various qualitative factors, including the company's small geographic coverage, its concentrated customer mix, the expected heightening competition in the non-traditional EMS market, and the technology risks associated with the electronics segment. Nonetheless, SVI continued to report strong revenue and earnings growth over the last four years, mainly due to the strong demand in the non-traditional EMS segment and capacity expansion. In 2007, its EBITDAR grew 27% to THB411m. Gross margin and EBITDAR margin improved to 12.8% and 7.6% in 2007 from 11.4% and 6.8% in 2006, respectively. Despite increasing capital expenditure in 2008, SVI is likely to maintain low financial leverage, with total adjusted debt to EBITDAR at below 1.0x over the next three years. Other key concerns include SVI's volatile working capital requirements, which could impact SVI's operating cash flows and financial position, as well as its exposure to foreign exchange risk as almost all of its operating cash flow is US Dollar and Euro denominated, while its debt is mainly in Thai Baht. However, the latter is partly mitigated by the purchase of forward contracts. The Stable Outlook reflects the expectation that SVI will be able to maintain its profit margin and generate strong cash flows to support its capital expenditure and dividend payout, as well as keep its financial and liquidity consistent with the current credit metric. Founded in 1985, SVI (formerly Semiconductor Venture International Company Limited) is a Thailand-based electronic manufacturing company. The company engages in fully turn-key EMS, providing full box-build and system build of electronic products as well as printed circuit board assembly to customers in industrial OEM products. SVI's major shareholder is H&Q Asia Pacific Group (an Asian private equity firm focusing on growth sectors) which holds a 59% stake, while the rest is widely held by the public. Contacts: Obboon Thirachit, Wasant Polcharoen, Vincent Milton, Bangkok, +662 655 4755. Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215.