GLOBETRONICS TECHNOLOGY BHD

GLOBETRONICS is developing a number of new products, some of which could be rerating catalysts.

The more certain new products for 2019 would be the new generation of light and gesture sensors, which could have enhanced functionality and drive additional sales volume, apart from replacement demand.

UOBKayHian said the growth drivers of the demand for gesture sensors could be its end-client’s launch of new wireless earphone in 2019 and the strategy of bundling existing wireless headphones with 2019 smartphone models.

“Meanwhile, the growth driver of light sensors still largely relies on whether there will be more smartphone models that feature two light sensors per smartphone, given its end-client’s relatively flat smartphone sales.”

Beyond the existing products, the research house said Globetronics is working on three other sensor-related products.

“First, Globetronics is developing a hybrid imaging sensor (for camera applications) with its sensor client. This sensor is for its US smartphone end-client. Commercialisation of this sensor is still unclear (either 2019 or 2020) but it could be a key catalyst.

“Second, Globetronics is producing a small volume of imaging sensors with its end-client, a Chinese Android phone maker.”

UOBKayHian said Globetronics expects monthly production volume to increase to 500,000 to one million in the second half of 2019 from 50,000 units currently, adding however that this is unlikely to be a gamechanger.

“Third, Globetronics is working with a potential new EU customer on environmental and bio sensors. If this were to materialise, it would allow Globetronics to diversify its customer base; initial capital expenditure is estimated at RM20mil.”