AffinHwang Capital maintains Buy on Globetronics,ups target to RM6.28

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KUALA LUMPUR (March 18): AffinHwang Capital Research has maintained its “Buy” rating on Globetronics Technology Bhd at RM4.90 with a higher target price of RM6.28 (from RM5.31) and and said that trading at 19x house 2015E EPS, Globetronics stock was not cheap.

In a note today, the research house said that foreign and institutional shareholdings remain near their peaks.

It said the market was likely rewarding Globetronics for its successful earnings record and solid yields.

“To foster steady earnings growth, Globetronics is rapidly expanding its sensor business, which we expect to grow by 45% year-on-year in 2015.

“By 2016, we expect the sensor business to account for 57% of revenue, up from 32% in 2014.

“We raise our 2016E EPS by 18% on optimism about the new sensor product, following mass production of wearable sensors in 2015. We forecast a 2014-17 EPS CAGR of 25% and raise our target price to RM6.28,” it said.