Asiatravel.com (5AM.SG) off 5.6% at $0.425 after its FY10 net profit comes in 64% lower at $2.06 million, despite revenue +17% at $83.9 million.

Kim Eng says results below expectations; "the disappointing performance was due to higher operating expenses arising from aggressive launches of new products and sales channels. Consequently, no final dividend was declared and full-year total dividend was 0.6 cents per share."

Downgrades stock to Hold, lowers target to $0.47 from $0.62, expects further challenges for group in near term, cuts 2011-13 earnings forecasts by 20%-50%.

Adds, with tourism recovering in Asia, "this appears to be an opportune time for AST to expand its product offerings...However, execution risk is present and the additional revenue that it can generate from the marketing dollars spent remains to be seen." Volume thin, suggests selling pressure limited; further downside from current levels unlikely.