PETALING JAYA: Smart sensor producer Globetronics Technology Bhd’s plans for expansion have not been halted as earlier thought and the company’ recent share price weakness could be a chance for investors to accumulate its stock.
AmInvestment Bank’s research unit said, via its channel checks, that the key sensor customers’ qualification programmes for the next generation of light and gesture sensors have not been halted and mass production is still set for June and July respectively as planned.
“We do note that forecasts could change in the case of any changes in end-customer demand, but we believe that demand for its end-customer’s products would remain strong despite potential supply chain issues relating to the global chip shortage, ” it told clients in a report yesterday.
AmInvestment pointed out that group would spend RM50.2mil over three years to establish a cloud-based platform, incorporating Industry 4.0 (IR4.0) applications such as artificial intelligence, big data, and augmented and virtual reality to its operations.
The platform would enable the company to reach higher levels of customisation, shorter production times and improve product quality.
The research house has upgraded its recommendation on Globetronics to “buy” from “hold” after the recent decline in its share price and said that it is maintaining its forecasts and fair value of RM2.84 per share, pegged to an FY22 price earnings of 24 times on the stock.
At last look, the Globetronics stock was at RM2.50 per share, valuing the entire company at some RM1.7bil.
In the past one year it has traded between RM1.77 and RM3.40 per share.
The company’s prospects arise from its strength in smart sensors with new generation sensor demand expected to drive growth ahead, a ramp-up in laser automotive headlamps and potential opportunities to be secured from the US-China trade war that could lead to customer diversification and revenue enhancement, AmInvestment added.StarBiz had reported that Globetronics forecast a stronger 2021, barring unforeseen circumstances.
Quoting group chief executive officer Datuk Heng Huck Lee, (pic) the report said that the group had received strong orders for most of its products.
Specifically, it has four new projects for 2021 and beyond and all these new projects will boost its growth and bottomline starting from the first half of 2021, Heng was quoted as saying.
“Following the decline in share price, we believe Globetronics is undervalued and that investors should take advantage of this correction to accumulate the stock, ” said AmInvestment.