INVESTORS of Globetronics Technology Bhd can expect earnings momentum to sustain into the company’s 4Q FY2020 on the continuous production ramp-up for new phone launches and new sensors for various applications.
UOB Kay Hian Research is projecting production of the company’s light sensors to be maintained at more than 30 million units/month amid the launch of a US-branded smartphone globally.
“Similarly for gesture sensors, monthly volume loadings should be maintained at 35 million/month in October,” revealed analyst Alex Goh in a company report.
“We expect this to ramp up further to 40 million/month in November with the new capacity in place, riding on higher demand from its end-customer.”
Elsewhere, UOB Kay Hian Research expects motion sensor volumes to stabilise at 5.5 million/month. As for quartz crystal timing devices, visibility for volume loadings are healthy, and are expected to be maintained at 40 million/month for 4Q FY2020.
All-in-all, the research house expects 4Q FY2020 revenue of around RM70 mil (+6% quarter-on-quarter; +18% year-on-year) and net profit of RM18 mil (flat qoq, +13% yoy).
“On top of the pick-up in volumes of light and gesture sensors from July 2020, we expect new generations of these sensors to be qualified from end-2020,” Goh pointed out.
“Additionally, further impetus could come from the introduction of a new sensor, for which the group is working with the same major customer, with commercialisation to take place in the next two quarters (delayed due to the movement control order).”
Meanwhile, Globetronics laser lighting business has gradually improved from 2Q FY2020 although it is still being plagued by inconsistent wafer supply.
“Qualification programmes for other automotive laser light devices are ongoing, with this segment still being the key focus for 2021,” noted Goh.
As a whole, UOB Kay Hian Research maintained a “buy” rating on Globetronics with an unchanged fair value of RM4.40.
At 2.31pm, Globetronics was up 13 sen or 4.64% at RM2.94 with 899,200 shares traded, thus valuing the company at RM1.96 bil. – Nov 5, 2020
