MIDF upbeat on Globetronics’ new techno product line

by **Cals** Mon 13 Jan 2014, 18:20

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Monday, 13 January 2014 11:32

KUALA LUMPUR (Jan 13): MIDF Research remains upbeat on Globetronics Technology Bhd’s prospects as the electronics manufacturer is working with European and US customers to produce a new range of electronic products to be introduced in the second half of the year.

In a note today, the research house said Globetronics will introduce a new range of light-emitting diode (LED) chips, three-dimensional imaging modules and multi-port sensors that will incorporate better functional features.

The new multi-port sensors will be incorporated in smart devices, enabling detection of three-dimensional motion such as depth.

“We maintain ‘buy’ for the stock at RM3.15 with unchanged target price of RM4.19.

“We make no change to our earnings estimates at this juncture as we have imputed these into our revenue growth assumptions,” said Zulkifli Hamzah and Martin Foo Chuan Loong, research analysts at MIDF.

Zulkifli and Foo said they believe Globetronics will benefit from the ‘wearable’ product segment once it gains market traction, noting the sensor segment has recorded impressive topline growth.

They said this is in-line with their positive industry sector view that the demand for tablet and smartphone remains strong.

“Coupled with attractive yield of about 6%, we believe the company’s strategy of pursuing niche segment in the technology industry is bearing fruit,” said Zulkifli and Foo.

Furthermore, the pair expects the bulk of Globetronics’ capital expenditure totalling RM50 million, will be spent for new product development and expansion.