Fu Yu: Management is keen to reward shareholders with a maiden dividend upon approval of capital reduction with a payout of 0.5 cent at the upcoming AGM in July. They are also bullish on the medical, environment and automobile products, especially from clients in the medical and environment space. The company is keen to expand contributions from the automobile sector and is already in talks with several parties at the moment.
Fu Yu may be a potential key beneficiary of 3D printing in the future as both HP and Venture Corp are its existing customers and Fu Yu is one of the key plastic manufacturers for HP.
With rich cash flow generation from operations of $20m-$30m a year, RHB believes Fu Yu is a cash cow ready for milking and that FY15 will likely be a key inflection point to reap gains for this treasure chest.
RHB maintains its BUY rating with TP: $0.30 (WACC: 12%, TG: 0%).
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