Stronger volume loading projected for Globetronics in third quarter of 2017

KUCHING: Globetronics Technology Bhd’s ( Globetronics) first half of 2017 (1H17) earnings have met expectations, with much stronger volume loading projected by analysts in the third quarter of 2017 (3Q17).

In a filing on Bursa Malaysia, Globetronics reported that for the six months ended June 30, 2017, the group recorded a revenue and net profit of RM112.8 million and RM11.7 million as compared to RM116.2 million and RM10.2 million respectively in the corresponding period last year.

Globetronics’ 1H17 normalised earnings accounted for 32.3 per cent and 21.1 per cent of the research arm of MIDF Amanah Investment Bank Bhd’s (MIDF Research) and consensus earnings estimates respectively.

Despite dismal 1H17 earnings performance, this was within MIDF Research’s expectation as the research arm expected much stronger volume loading in 3Q17 primarily from the sensor division.

“This is expected to significantly boost the group’s topline contribution,” the research arm said.

“Despite a marginally weaker 1H17, the production volume from the sensor division is expected to surge in 3Q17 due to expected improvement in end customers’ demand.”

However, MIDF Research viewed that the market has already priced-in the positivity as the share price has surged by 180.6 per cent on a year-to-date basis.

“In addition, dividend yield is now expected to came in below four per cent,” it said.

All factors considered, MIDF Research maintained its ‘neutral’ recommendation on Globetronics, keeping its target price of RM5.31 per share for the group.