KUALA LUMPUR: Maybank IB Research has cut its earnings forecasts for Globetronics for the financial year ending Dec 31, 2016 till 2018 by 36%-52% on lower sensor demand and lower USD/MYR assumption.
It revised its target price for the group to RM3.90, down by 43% and downgraded its call on the stock to Hold, Maybank IB said in a note on Wednesday.
Globetronics’ first quarter net profit of RM4mil disappointed as operating margin collapsed on weaker revenue, exacerbated by forex translation losses. Revenue fell 24% quarter-on-quarter on weaker demand across the board for all products including the sensor division which saw its end-client, a Tier-1 premium smartphone brand, deferring shipments on inventory rationalisation.
Coupled with an unrealised forex loss of RM4.2mil from mark-to-market of its cash/receivables at end-Mar, first quarter net profit plunged 77% quarter-on-quarter to just RM3.7mil, thereby meeting only 4% of Maybank IB’s and consensus’ full-year net profit forecasts.
Globetronics proposed a 2sen/3sen final/special dividend for 2015.
Maybank IB expects the company’s sensor volume to contract by 39% year-on-year in 2016 (from 35% growth previously) on the back of weaker smartphone shipment year-on-year in the first half of 2016 and mass production deferment of the 3D-imaging sensor to 2017.
It expects 2016 revenue to contract by 18% year-on-year, but expects growth to resume in 2017/2018 on mass adoption of the 3D-imaging sensor but slightly offset by a lower USD/MYR forex forecast of 3.90 average from 4.10 previously.
Adoption of dual camera in smartphones should be more pronounced in 2017 according to Sony, a prominent global CMOS sensor supplier. “As such, in 2017, we expect Globetronics to sell 200 million units of the 3D imaging sensor which equates to adoption by 100 million smartphones,” it said.
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