MemTech
Memtech is one of the world’s top 10 suppliers of mobile phone keypads. The company has built a strong foundation in the PRC mobile phone manufacturing industry. IT currently supplies more than 80% of lenovo’s and Ningbo Bird’s keypad requirements.
Dividend Yield: 4.878%
Current Price: 20.5cts
12 Month High: 39cts
12 Month Low: 17cts
Earnings per Share: 2.4cts
Book Value per Share: 11cts
Dividend per Share: 1cts
PE: 6.45 times
Price to Sales: 1.97 times
Current Ratio: 2.80 times
Quick Ratio: 2.59 times
Total Debt/Assets: 0.28 times
Total Debt/Equity: 0.40 times
ROE: 12.74 times
The above figures are taken from DBS Clarity. But i realise that its PE should be closer to 8.54 rather than 6.45. For folks using the service and are really interested to invest in a certain prospect, please do your due diligence and do your own verification.
Memtech has zero long term debt and its Current Liabilities (30 mil) are adequately covered by its 32 mil of cash and short term instruments. However, of particular worry is that MEmtech is spending greater on capital expenditure then what they make from operations. I believe the capital spending will be reduced otherwise they will have to issue debts or placement to finance their capital spending, because their operation revenue has to increase substantially to sustain a 12 mil capital expenditure.
Risks (from CIMB GK)
- High receivable days: Memtech’s debtor turnover days averaged 178 days in Dec 05 (227 days in dec 04). This was much higher than the number for its two competitors (Silitech and Ichia), which hovered at 100 days in 2005 and 80 days in 2004. The high turnover days may lead to future provisions.
- Volatility in raw material costs. Raw material account for 40-50% of COGS. Thus, a spike in raw material prices may affect margins.
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