Memtech International's 1Q17 results were within expectations. Revenue increased 9.8% YoY to US$36.4m, or 21.6% of our full-year forecast, mainly due to increased sales in the automotive & consumer electronics segments.

In 2016, 1Q revenue contributed 20.8% of full-year revenue. 1Q17 gross profit increased 24.9% YoY to US$6.6m, boosted by the increase in gross profit margin, which increased from 15.9% in 1Q16 to 18.1% in 1Q17. 1Q17 PATMI jumped 180.7% YoY to US$1.6m.

One-off items include a write-back of stock obsolescence of US$0.2m. Excluding this one-off, 1Q17 PATMI made up 18.0% of our full-year forecast, which we deem in line with expectations.

Pending further updates from the management, we place our Hold rating and fair value of S$0.77 under review.

Source: OCBC Research - 28 Apr 2017