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Saturday, 6 October 2012

Innotek running out of innovative ideas?

Innotek pays a dividend rate of $0.05 consistently since 2009.  But is Innotek able to keep the same dividend payout rate of $0.05 for its next XD in May'13? 

Innotek is able to maintain gross profit margin at 12% quarter on quarter.  But continuing businesses seems under severe overheads pressure.  Gross profit barely or not enough covering overheads.  Its business operations are in Hong Kong and Mainland China so l would think costs of operations will continue to burden the company heavily due to increasing inflationary pressure and competitions.

With the improvement in Sabana Reit share price and if this is maintained then Innotek is likely to reverse the provision for impairment loss.  Other than this, l do not see any growth prospect at all for full year 2012 (and 2013). 

With last done price $0.34 at almost at 52 week low so if it continues to pay dividend $0.05 then this represents a 14.71% yield.  

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