CGS-CIMB has initiated coverage on contract manufacturer Hi-P International with a "hold" recommendation and a target price of S$1.23.The counter was trading at S$1.17, down S$0.01 or 0.9 per cent before the midday break on Wednesday, amid broad market declines on the Singapore bourse."Given its net cash balance sheet (of S$197 million) as at end June 2020, mergers and acquisitions can provide Hi-P with growth opportunities," wrote CGS-CIMB analysts William Tng and Darren Ong in a research note on Tuesday.In October last year, Hi-P announced that it was acquiring high-precision plastics manufacturer, South East Asia Moulding Company, which has production facilities in Singapore."The acquisition brought new capabilities and a new customer for Hi-P, in our view," the analysts said.Stay updated with BT newslettersHi-P's management has guided that one major customer, a wireless and computing device firm, accounted for slightly less than 50 per cent of its fiscal 2019 revenue. Another three companies involved in personal care and lifestyle products each accounted for 7 to 8 per cent of its revenue for FY2019.Given its net cash balance sheet, Hi-P is exploring inorganic growth opportunities to reduce its customer concentration risk and expand the company, CGS-CIMB noted.The brokerage derived a target price of S$1.23, based on its estimate of a 1.52 times price-to-book value for FY2020."Given a total potential return of 1.6 per cent relative to our target price, our recommendation is a 'hold'," CGS-CIMB said.Hi-P is a global contract manufacturer of smartphones, tablet computers, consumer electronics and medical devices, among other things. As at end July, the tech play has 13 manufacturing plants in Singapore, Thailand, Poland and five locations in China.