Last week, Memtech International announced a dividend policy of paying annual dividends of not less than 30% of consolidated net profit. The cumulative, nominal dividend payout since its listing in 2004 is 44.6 S-cents, after adjustments for share consolidation. We note Memtech’s commitment to paying its shareholders dividends even during the loss-making years of 2012 and 2013. The FY15 dividend payout ratio was 48.5% at 3.3 S-cents. We are projecting FY16 dividend payout of 3.6 S-cents. Maintain HOLD and our fair value estimate for the stock is S$0.725.

Source: OCBC Research - 7 Mar 2016