(GTB MK/BUY/RM5.25/Target: RM6.08)

Globetronics’s 1Q17 results were with expectations. 1Q17’s sales and core earnings contracted yoy on weak demand for its sensors, but performance saw improvement on a qoq basis. We expect meaningful qoq earnings growth in 2Q17, and a much stronger hoh earnings growth in 2H17, as maiden contribution from its new light sensor is expected in May and the production of gesture sensor is also in the midst of ramping up. Globetronics trades at 13.4x 2018F ex-cash PE with an attractive yield of 6.1%. Maintain BUY. Target price: RM6.08.

Source: UOB Kay Hian Research - 26 Apr 2017