The outlook is stable. Mature business and we expect to meet our full year forecast. We view Nam Lee as a yield-play. With the ample cash on the balance sheet, we believe in Nam Lee’s ability to maintain FY16’s dividend of 2.0 cents in FY17. Positive surprise will be from higher than expected dividends being proposed.
Maintain Buy; lower target price of $0.51 (previously $0.52)
Our target price represents an implied 11.5x FY17e forward P/E multiple, compared to the Straits Times Index twelve-month forward P/E multiple of 14.8x. The last close price of $0.365 offers an attractive estimated dividend yield of 5.5%, which does not take into consideration the cash hoard that continues to be retained on the balance sheet.