(GTB MK/BUY/RM6.03/Target: RM7.05)

Globetronics is ramping up production volumes on its new sensor products and is planning for Phase 2 capacity expansion to cope with end-client’s demand. Although we estimate a strong net profit CAGR of 76% in 2016-19, there could be earnings upside in 2018-19 due to: a) commercialisation of developing products (particularly 3D imaging sensors), and b) strong demand for gesture sensors (due to end-client’s bundling strategy). We increase 2018-19 net profit forecasts by 15-16%. Maintain BUY with a higher target price of RM7.05.

Source: UOB Kay Hian Research - 30 Jun 2017