Recent announcement have showed that EPF has pared down their stake in Uchi to below 5% shareholdings. It is now unknown if EPF would continue selling their stakes as it is not going to be reported anymore.
Financially, Uchi is doing very well this year compared to last year where demand for their products was reduced. So far for the past 9 months of this year, they've doubled their profits compared to last year as orders picked up. Cash levels are still very healthy and they are still debt-free. Continued growth is dampen by the strengthening RM against the USD, where their recent report stated although their USD revenue grew by 36%, when translated to RM it is only 26%.
Dividend was proposed in the latest report but ex-date will be announced later. It is expected Uchi will announce another dividend in the last quarter. Uchi are known to pay at least 70% of their EPS as dividends. Which makes ownership of their share very rewarding based on their performance.
Current price of RM1.30+ range is within the >5% dividend yield for 2010 including the 5 sen declared. If next quarter results mimics the Sept 2010 results, a minimum of 10 sens dividend is expected making the dividend yield about 7.5%.
If we believe that the recent price is being subdued due to continuous EPF dumping, it is only a matter of time before the sell-off stops and the counter resumes its natural, dividend backed share price appreciation. That is if the next quarter results performs the same or above the last results.
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