Brokers' take
Add BT as a preferred sourceMemtech International >Hold (maintained) UOB Kay Hian, Oct 12 Oct 12 close: S$0.875 Target price: S$0.95
MEMTECH International's gross margin was weaker than expected in Q2 2018 due to higher costs of raw materials - silicone rubber and plastic resin. Margins could stay weak as raw material prices remain elevated due to supply shortages from a factory shutdown and higher oil prices.
Memtech has little room to pass on the increase in raw material prices, aside from negotiating for a lower cost-down. On the other hand, Memtech could quote for higher prices for new contracts to incorporate the higher raw material costs.
