Key point at last friday’s analysts briefing is that the monthly sales trend and customer forecast suggests that 1Q ‘09 could be the low point for the company with Jan’09 sales of $11.16mln, Feb ’09 sales of $11.71mln, Mar ’09 sales of $13.73mln, April ’09 sales of $14.46mln and management’s indication that customer forecasts points to further improvements in May and June ’09.

YOY declines are also moderating with Jan ’09 - 38.7%, Feb ’09 -27.7%, Mar ’09 -21.1%, April ’09 - 16.9% and May ’09 and June ’09 indicating further moderation in YOY declines. And based on customer’s indicative forecasts, management is hopeful that 2H ‘09 will be better than 1H ‘09.

With factory utilization rates still in the 50-60% range, the company is able to generate more sales and profits without the need to put in much more capex this year, with management estimating capex to be around $4mln, down from $12.71mln last year, likely enabling them to generate strong free cash flows this year. This in turn suggests a high chance that dividends can rebound from 2008’s 1 cent to 2007’s 1.6 cents (about $8.236mln). With their strong financial position (cash of $26.387mln versus debts of $7.018mln) the company could also restart their share buy back program.

Hence despite having risen about 73% since our upgrade in Feb ’09, we continue to like the company for its well diversified customer and geographical base as well as strong financial position and still reasonable valuations.