Final dividend was reduced from 2 cents last year to 1.5 cents this year, below our expectations by 0.5 cents, due to 4Q ended June ’09 bottom-line coming in marginally below our expectations ($2.677mln versus $3.4mln a year ago and $3.3mln a quarter ago) reflecting higher than expected raw material costs, lower forex gain, partially offset by tax writeback. Despite this, the final div of 1.5 cents plus the interim div of 1 cent is still higher than last year’s 2 cents a share, which provides a yield of 10% at its current share price.

Payout ratio is 96.8% against last year’s 89%, but historically, the company has been able to payout almost all or even more of its earnings, reflecting little need to reinvest in capex, strong and consistent operating cash flows as well as huge cash reserves.

Financial position as usual remains robust with cash of $48.54mln against debts of only $1.245mln, giving a net cash position of $47.295mln. However, with the 32% rise in share price since our upgrade to BUY on 22 July ’09, net cash now represents 32% of market cap, down from 40% then.

We understand from management that 4Q ended June ’09 raw materials as a % of sales rose to close to 37%, up from their usual 30-32% due to one time expensing of raw materials purchased in preparation for the year-end seasonal ramp and should normalize back to the usual 30-32% range going forward.

Depreciation charge in 4Q also rose to $2.1mln, above their usual $1.6mln quarterly run-rate due to one-time write-down of their Taiwan machineries and should revert back of the usual $1.6mln going forward.

Looking ahead, as usual, management maintains a cautiously optimistic stance, warning about the uncertain business outlook due to the lingering effects of the global economic downturn and rising raw material costs.

However they admit for the first time that business activities are stabilizing, which we believe reflects the upcoming launch of the new Microsoft Windows 7 in Oct ’09 as well as a new Microsoft Office in early 2010, which coincides with the much anticipated PC upgrade cycle.

Being a key partner of Microsoft, the company has historically benefitted from all previous new software launches hence we expect this time to be no different.

Providing a yield of 10% while we await for earnings to kick in from Microsoft’s new software launches, the stock remains attractive. And this year being their 30th anniversary, hopefully there will be some goodies installed for shareholders as well. Maintain BUY.