KUALA LUMPUR (July 28): Shares in Globetronics Technology Bhd fell as much as nine sen today after posting weaker-than-expected results for the second quarter ended June 30, 2021 (2QFY21).
At 10.35am, the semiconductor-based product manufacturer was down eight sen or 3.52% at RM2.19, with 964,100 shares traded.
Yesterday, Globetronics posted a 50% drop in net profit on a quarter-on-quarter (q-o-q) basis to RM6.25 million, from RM12.54 million, on the back of a 16% drop in revenue to RM46.4 million from RM55.4 million.
The company attributed the decline to lower volume loading of products and a drop in economies of scale from most of the group’s customers.
Despite the second-quarter results, MIDF Research upgraded the counter to a "buy" from "neutral", suggesting that the company’s outlook remains attractive for the coming months.
Normalised earnings for the first half ended June 30, 2021 (1HFY21) rose 23.1% year-on-year (y-o-y) to RM16.8 million, while revenue rose 3% to RM101.8 million, it said.
“All in, Globetronics’s 1HFY21 financial performance came in below ours and consensus expectations, accounting for 25.3% and 26.3% of the 1HFY21 earnings estimates respectively,” it pointed out.
It added, however, that based on historical trends, the group would perform much better in the second half of the financial year.
“Moving forward, we expect a more consistent earnings growth, mainly supported by the group’s new generation of smart sensors, which include light, gesture and motion sensors.
“In addition, the recovery of the automotive market would also lend support to the group’s LED business,” MIDF Research said, keeping its target price (TP) unchanged at RM3.22.