Will Memtech International survive the tech sector turbulence?

The industry neophyte faces risks of order pushbacks.

The sluggish recovery of the tech industry is barely a blip on Memtech International’s radar, according to a report by OCBC. The company counterbalances the risk of order pushbacks, relies little on industry outlook, and has new orders in the pipeline.

Memtech’s baseline growth is bolstered significantly by its exposure to an array of end-markets. Despite the tepid outlook for the tech sector, the company has the benefit of having a diversified operating model. For instance, notwithstanding a global economic downturn, the downside risk of potential order delays from customers in the consumer electronics is curbed by the robust industry prospects in the automotive segment.

OCBC further notes that Memtech can rely on the ramp-up of existing orders in the automotive space, and new orders from both new and existing customers to boost revenue growth in 2016.

Meanwhile, the gradual shift in product mix over the next three years from decorative to high-precision functional components will contribute to a higher gross margin.

Additionally, Memtech’s ongoing automation investments are set to drive up productivity, and limit wage pressures faced in the company’s China production plants.