JCY

With an impressive quarter, investors are wondering if JCY will reward its shareholders with better dividends. However things are looking up for shareholders as JCY has announced a single tier tax exempt dividend of two sen per for 1QFY2012.

Market observers are expecting a jump in dividends in FY2012 as JCY typically pays out 50% of its profit to its shareholders.

Meanwhile rumors have been that JCY is looking to acquire other companies and the names that have cropped up include Eng Tech Bhd. Observers speculate M&As among the component makers following the consolidation of vendors of WD and hitachi GST and Seagate and Samsung. The Thai floods have also provided JCY with a good opportunity to acquire smaller players at cheaper prices.

Wong said that JCY is always looking at increasing its market share however, JCY will look at the two important factors of pricing synergy before acquiring competitor. For now (Feb 2012), JCY’s current strategy is to increase production capacity is enough to drive it forward.

Industry observers said that some component manufacturers are expecting to return to pre floods capacity by 3QFY2012, which may pull down the average selling price of HDDs.