Memtech

Memtech: CIMB visited Memtech’s Dongguan factory, one of its three manufacturing facilities in China, where the breakdown of sales for consumer electronics, telco equipment and automomative is 50/30/20, and utilisation about 80%/

Going forward, Memtech could see meaningful contribution to FY16 topline, as it is currently the only supplier of silicone rubber parts for Beats new model. Beats is market leader in premium headphones and was acquired by Apple in 2014.

Nearer term, consumer electronics sales could also pick up, especially if Amazon’s orders strengthen in anticipation of the year-end gift season. Nevertheless, there could be some offset from automotive, given a slower outlook in China.

The house maintains its Add call, with TP of $0.17. Share buybacks should provide support in share price.