Glo­be­tron­ics tum­bles on earn­ings down­grade

The Star Malaysia - StarBiz - - News - In­tan­zainul@thes­tar.com.my

PETALING JAYA: Shares of Glo­be­tron­ics Tech­nol­ogy Bhd took a dive yes­ter­day fol­low­ing an earn­ings down­grade by May­bank In­vest­ment Bank Re­search (May­bank IB).

The re­search house has slashed its profit es­ti­mates for Glo­be­tron­ics by 9%-13% for fi­nan­cial years 2017, 2018 and 2019, as the newly launched Ap­ple smart­phone does not fea­ture the bundling of wire­less ear­phones.

Glo­be­tron­ics makes ges­ture sen­sors, which are used in the mak­ing of wire­less ear­phones.

It was ear­lier as­sumed that the new Ap­ple smart­phone would in­clude the bundling of wire­less ear­phones.

May­bank IB has down­graded its call on Glo­be­tron­ics to a “sell” and low­ered its tar­get price to RM5.80 from RM6.40.

“We had pre­vi­ously cau­tioned that con­sen­sus has been too op­ti­mistic in their es­ti­mates for the de­mand of ges­ture sen­sors, which may have as­sumed the bundling of wire­less ear­phones for up to all three vari­ants of the new smart­phone.

“We be­lieve this re­al­ity would likely trans­late to down­grades in for­ward earn­ings for Glo­be­tron­ics,” it said in a re­port.

Yes­ter­day, Glo­be­tron­ics’ share price closed 3.5% or 23 sen lower to RM6.30.

An­a­lysts had ear­lier es­ti­mated Glo­be­tron­ics’ earn­ings would be driven by the po­ten­tial in­crease in de­mand for ges­ture sen­sors as Ap­ple may bun­dle its wire­less head­phones for new smart­phones.

Ac­cord­ing to a UOB KayHian re­port dated Sept 6, Glo­be­tron­ics’ ca­pac­ity for ges­ture sen­sors was seven mil­lion units per month and the com­pany has al­lo­cated about RM98mil for ca­pac­ity ex­pan­sion for the sen­sor seg­ment.

It said Glo­be­tron­ics was the sole ven­dor for its end-client for the sen­sor seg­ment.

May­bank IB has cut its vol­ume es­ti­mates for Glo­be­tron­ics’ ges­ture sen­sor by 33%-40% for this year to 2019.

How­ever, it ex­pects that the im­pact would be cush­ioned by the higher sales of wire­less ear­pieces from a likely in­tro­duc­tion of the sec­ond-gen­er­a­tion wire­less ear­phones in 2018.

It said val­u­a­tions of Glo­be­tron­ics’ shares were “ex­pen­sive” at 20.7 times 2018 price earn­ings ra­tio, cit­ing slower near-term growth.

“With the share price up 89% year-to-date, we be­lieve the stock is ripe for profit tak­ing,” it said.

For the first half ended June 30, Glo­be­tron­ics re­ported a 15% jump in net profit to RM11.73mil from RM10.2mil a year ago on the back of a slower sales growth of RM112.7mil from RM116.2mil pre­vi­ously.

Mean­while, Hong Kong-listed Cow­ell e Hold­ings Inc – a maker of iPhone cam­eras that de­rives about 81% of its rev­enue from Ap­ple, ac­cord­ing to data com­piled by Bloomberg – tum­bled as much as 6.6%, while Tai­wan’s Catcher Tech­nol­ogy Co slid the most since Novem­ber.

By INTAN FARHANA ZAINUL Wrong as­sump­tion: Re­search houses have slashed Glo­be­tron­ics’ profit es­ti­mates as the new iPhone X does not fea­ture the bundling of wire­less ear­phones. — AFP

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