Fu Yu Corp a ‘stable dividend dispenser’ despite Covid-19: RHB

Despite the impact of the Covid-19 pandemic, RHB Securities has remained bullish on Fu Yu Corp as a “stable dividend dispenser”.

The brokerage expects the precision plastic components manufacturer to make a 1.7 cents payout for FY20, which translates to an “attractive” yield of 6.3%.

This comes as Fu Yu has a strong net cash position of $97.8 million and zero borrowings, it notes.

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SEE:Analysts positive on Fu Yu Corp as 9M20 profits surpass expectations

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“Despite a blip in FY20 caused by the Covid-19 situation, we believe Fu Yu – with a strong net cash balance sheet – will [be] able to weather the storm,” RHB head of research Jarick Seet writes in a noted dated Dec 28.

“We also think that it can at the same time provide its investors with attractive dividends despite an estimated temporary drop in profits for FY20,” he adds.

RHB has maintained its “buy” rating for the stock with an unchanged target price of 30 cents.

As at 10.42 am, Fu Yu was flat at 25.5 cents with 11,800 shares changed hands.