AffinHwang Capital upgrades Globetronics, raises target to RM4.88

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KUALA LUMPUR (Oct 31): AffinHwang Capital Research has upgraded Globetronics Technology Bhd (Globe) to “Buy” with a higher target price of RM4.88 (from RM3.58) and said it foresees a strong turnaround in Globe's sensor division in 2017, as a major new product is underway.

In a note today, the research house said there seems to be much better visibility and certainty this time round in terms of product rollout, as its customers keep a close watch on product development.

“We expect the new sensor to fuel the bulk of the 160% y-o-y EPS growth we forecast in 2017, although we also expect production for a second sensor which has already been commercialised to ramp up once issues in the supply chain are resolved.

“We think the risk-reward has turned favourable and we upgrade Globe to Buy from Hold with a higher target price of RM4.88. Yields at circa 7% also look compelling,” it said.