Maybank reiterates buy on Globetronics

KUALA LUMPUR: Maybank Investment Research reiterated its buy call on Globetronics Technology Bhd with an unchanged target price of RM5.60 as it believes that recent selling on the counter was overdone.

Globetronics's 1Q17 net profit of RM15mil came in-line with the research house's FY18 forecast at 22% but below consensus' at 17%. 

According to Maybank Investment Research, the softer revenue on quarter was due to weak sensor volume loading coupled with high fixed costs, which caused a bigger drop in bottomline.

It said further weakness in the sensor division from an inventory rationalisation for the supply chain of the North American premium smartphones in 2Q18 is echoed by ams AG, which announced that 2Q17 revenue is expected to fall further.

"On the brighter side, ams AG is expecting a major ramp-up in 2H18 with possibly proliferation of its sensor offerings into other smartphone brands and even the broader consumer electronics segment going forward.

"Similarly, we expect GTB’s sensor revenue to pick up again in early 3Q18 in preparation for major smartphone launches from Sep 2018 onwards."