Globetronics top gainer in early trade on improved earnings

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KUALA LUMPUR (Oct 29): Globetronics Bhd shares topped the gainers list in early trade on Wednesday on the back of its improved third quarter earnings.

At 9.17am, Globetronics added 3.3% or 14 sen to RM4.38 with 61,700 shares done.

The company had reported higher 9M14 revenue of RM265 million (+9% yoy), driven by growth in its timing devices, proximity sensors and LED sorting business, offset by older packages reaching the end of their product lives.

Analysts said that the company’s 3Q14 core earnings, although up 2% sequentially (2Q14: RM16 million), were impressive considering that Globetronics booked lower grant income (received for its proximity sensors) of RM1 million, versus RM2 million in 2Q14

MIDF Research in a note Wednesday said Globetronics’ earnings kept pace with expectation, supported by expansion in topline and profit margin.

“Expecting no compromise in dividend payout due to stronger cash position.

“Maintain Buy recommendation with unchanged target price of RM5.45 based on DDM valuation methodology,” it said.