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Author: YiStock   |   Latest post: Wed, 11 Jul 2018, 11:13 AM

 

Gtronic - Q2 2018 Quarter Report Update (2) -YiStock

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GTB

 

I have initiated research on Gtronic back in Jun 2018. (click here). Since then, share price of Gtronic has appreciated from 2.16 to 2.60 today. A reasonable gain of 20% for me. But, can Gtronic share price continue to surge?

Gtronic has released it Q2 report for 2018. Thankfully it is not a kneejerk quarter, but a decent year-on-year jump of +14% on Revenue and +32% on the earning. 

 

I have extracted data for the past 14 quarters for easy reference:

Gtronic experienced tremendous success on it sensor segment from Q2,2017 to Q1, 2018 due to Apple's initiative on 3D imaging  truedepth camera used in its flagship Iphone X.  Apple has achieved tremendous success in Iphone X eventhough it is priced at USD 999. People just love Iphone X  !!! But, due to multiple speculative reports on possible poor performance of Iphone X, many investor got demotivated. Gtronic investors not spared either. Many times i wonder, how the small potatoes can continue to look down on Giant like Apple Inc? Today, Apple is already a TRILLION DOLLAR market cap company.

Having said that, bursa malaysia too, has many little potatoes, beware!

 

In Q1 2018 quarter report of Gtronic, management highlighted lower volume loading from April to May 2018 as customer need to deplete the inventory.

Below I found latest Q2 2018 Apple's inventory level.

in March 18, the inventory has surged to 7,662 largely due to Iphone X. However, in Jun 18, the inventory has decreased to approximately 5,936 level. This is certainly a good news to iphone supplier such as Gtronic & Inari who rely heavily on Apple.

 

@ Management Guidance in Q2 2018 report:

- Volume loadings have improved since Jun 2018.

 

@ AMS AG guidance in Q2 2018 report:

- STEEP sequential growth of 78% to 94% Q/Q , 46% -59% Y/Y 

 

@ APPLE Guidance in Q2 18 quarterly report:

Well, many may worry of number of units of Iphone sold is near stagnant. This point is certainly valid. However, bear in mind that the 3D sensing was only limited to only Iphone X. This situation is no longer valid with rumour saying all new launches of iphone will be equipped with such technology. Therefore, i believe the gtronic has just got bigger and bigger piece of portion in the same piece of pie. 

Furthermore, recent report indicated that ipad may going to have face ID too.

 

 The huge news should come from AMS Ag where it started supply a better VCSEL - PMSIL, with eye-safety interlock product to Xiao mi who is operated in android system. That open the whole new potential to Gtronic where android system has much more user in the world.

 

With all the good guidance above, personally, i anticipate Gtronic may go all the way to RM 4.00 or RM 5.00 in 2 yeasrs. You may curse market bad la..PE high la..all sort of reason to tell you from not buying. But do always remember, market never logical. 

 

Key Risk:

I personally not worry about tradewar as i have written an article about it. If you are interested, you may read from here.

My main concern is the volume loading for gtronic may be on much GRADUAL manner compared to the launch of Iphone X.

Just for illustration purpose, assuming 160 mil units sensor, the loading may look like 40 mil + 40 mil + 40 mil + 40mil. Instead of 40 mil, 100 mil, 20 mil, 0 mil.  

I said so because iphone X faces some launching issue back in 2017, that make the inventory build up in Q1 2018.

With that, i personally expect Gtronic growth should be on a more gentle manner, rather than big jump up / down for the next 4 quarters.

Anyway, the destination has not changed, just the arriving method a little more gentle.

 

Cheers!

YiStock

 

 

 

 

 

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  3 people like this.
 
YiStock Special note: With the iphone X inventory normalised, i think is fair to expect the demand for Gtronic light sensor for Iphone X should also recover. On top of the demand for 3 new model iphones to be launched in September 2018
15/08/2018 9:38 AM
stock_investor thank you for great article...mind share about prospect of inari as qr mention it will be challenging in the coming qr?
14/09/2018 9:58 AM
YiStock Inari relies heavily on apple iphone. Q2'18 poor result is within expectation where the whole supply chain experience lower loading volume. Excess inventory in supply chain need to be cleared first. Based on article above, the inventory has kind of back to normal in the supply chain.

Looking forward in Q3, personally i anticipate a favorable response by current iphone holders to upgrade to iphone 7, Iphone 8 and entry level iphone Xr which are now price at very much affordable level.

Pre-order is in Sept 2018, which means Inari and Gtronic should experience massive loading in early Q3 2018 (jun - Sept).

While this year all new iphones come with faceID, Gtronic i'm particularly in favour.

Inari expansion is massive. 5G will need more content and inari should experience explosive jump in earning. I see now a good entry point.

stock_investor/ thank you for great article...mind share about prospect of inari as qr mention it will be challenging in the coming qr?
14/09/2018 09:58
14/09/2018 10:46 AM
stock_investor Thank you for your explanation =)
22/09/2018 9:13 AM


 

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