FU YU CORPORATION LTD
F13.SI
Fu Yu Corp - Top Pick across the manufacturing space
- We brought Fu Yu Corporation (FUYU SP), our top Pick across the manufacturing space in Singapore on a Non-Deal Roadshow yesterday and here are our key takeaways from it.
- Firstly, management indicated that more dividends likely to be given as long as retained profits and profits generated can support the payout.
- We have also discovered that the share buyback mandate to purchase up to 10% of its total share has been approved and management is in the midst of allocating its budget for the buyback.
- They have also indicated that they are keen to meet the minimum trading price of SGD0.20 without exploring the option of share consolidation.
- We expect cost-cutting likely to continue, with an expected 10-15% decline in FY16 expenses.
- In addition, depreciation is also likely to further drop by SGD1.5m while capex remains around SGD7- 10m for FY16.
- Next, we expect revenue slide in FY16 to halt, with single digit revenue growth from existing and new customer.
- Lastly, margins can likely maintain or further improve from additional cost cutting and right sizing carried out in FY16.
- Maintain BUY with a DCF-backed TP of SGD0.29.
Jarick Seet
RHB Invest
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http://www.rhbinvest.com.sg/
2016-03-11
RHB Invest
SGX Stock
Analyst Report
0.29
Same
0.29
