Globetronics’ sensor volume this year should exceed 2015’s peak
KUALA LUMPUR: Globetronics Technology Bhd’s (Globetronics) 2017 estimate (2017E) sensor volume has been projected by Affin Hwang Investment Bank Bhd (AffinHwang Capital) to likely exceed the peak seen back in 2015.
Globetronics’ sensor-volume production in 2017 should exceed that of previous peak production volumes in 2015, despite only a half-year contribution from the light sensor project.
Meanwhile, the rsearch firm believed that gesture sensor volumes do not look like they will pick up this year.
“The reason behind our lower volumes is a cut in our assumption for the gesture sensor, which is designed into a wireless headset,” AffinHwang Capital said in a recent note.
“Based on our market research, we believe that the likelihood of the headset being bundled in with the device this year is looking increasingly slim as the window of opportunity narrows.”
The research firm has also cut its proximity-sensor volumes to reflect current production of one to two million units per month.
To mitigate this, AffinHwang Capital raised its light-sensor production volume to an average of 17 million units per month in 2017E from 10 million units previously, based on mass production of 25 million units per month from mid-2017.
“This largely takes into account that the light sensor will be designed into all platforms for its end customers,” the research firm said.
The research firm also raised its average selling price (ASP) assumption for the light sensor to account for the higher complexity of the chip.
Affin Hwang expected earnings before interest, tax, depreciation and amortisation (EBITDA) margins to improve from 24 per cent in 2016 to 28 per cent in 2017E and 29 to 30 per cent by 2018 to 2019E on the back of better contribution from the sensor division from 2017E onwards.
Based on a revenue-mix breakdown, the research firm estimated contribution from sensors to account for 59 per cent of revenue in 2017E, versus 39 per cent in 2015 at the previous peak.
Affin Hwang’s revised 2018E net profit of RM113 million (up 46 per cent year on year (y-o-y)) builds in the full-year impact from the light sensor going into mass production.
The research firm also assumed that the wireless headset is partially bundled and only for the premium smartphone model from 2018E, before being totally bundled in 2019E.
“With the current noise surrounding 3D sensing, we think that this project which was not introduced in the 2016 model, could ultimately be designed into the 2018E smartphone model.
“We understand that Globetronics has still been closely collaborating with its Swiss/ Austrian client and producing engineering builds,” AffinHwang Capital said.