Globetronics' FY12 results were above our and consensus forecasts, with its RM41.3m net earnings accounting for 107.2%/111.0% of our and street estimates. The group's FY12 EBIT margin improved to 15.9% from 10.8% in FY11. The better performance was driven by strongersales in Malaysia and Singapore, as well as a disposal gain from its Jitra plant. We expect a 25% sales contribution from the group's sensor manufacturing segment for FY13, which is set to be its fourth growth engine. We are maintaining our BUY call on Globetronics with arevised fair value of RM2.08, pegged to a higher projected FY13 EPS of 17.9sen, based on its 5-year average PER of 11.6x.
Above expectations. The group's FY12 results were above our and street estimates, with its full-year bottom-line accounting for 107.2% of our forecast and 111.0% of consensus estimate. Its revenue climbed 9.4% y-o-y to RM290.0m, mainly attributed to its Malaysia (+8.4% y-o-y to RM214.0m) and Singapore (+119.4% y-o-y to RM52.6m) segments, while net earnings surged 54.9% y-o-y to RM41.3m. Meanwhile, the group's FY12 EBIT margin improved to 15.9% from FY11's 10.8%. The better performance also included a RM2.3m net disposal gain of its Jitra plant. Stripping off the one-off gain, net earnings are still commendable at RM39.0m, up 46.3% y-o-y.
Lower q-o-q on seasonality, one-off gain. The 4QFY12's net profit of RM10.9m soared by more than one fold y-o-y due to an improved product mix, but was 21.0% lower q-o-q on seasonality. Generally, its 4Q was weaker than 3Q as most orders were pushed forward to 3Q ahead of the festive seasons in 4Q. In addition, the one-off disposal gain in 3QFY12 widened the quarterly disparity. Excluding the one-off gain, 3Q net earnings would normalise to RM11.9m, representing a 5.8% q-o-q decline.
Final & special dividend of 3 sen. Globetronics is proposing a final single-tier dividend of 4% (2 sen) and a single-tier special dividend of 2% (1 sen) to reward its shareholders, bringing the total dividend to 12 sen for FY12. The company is in a net cash position, with total cash of RM106.1m and no borrowing as of end-December 2012, which is equivalent to net cash per share of 39.3 sen.
Sensor manufacturing and assembling to be its fourth growth engine. The company started its sensor manufacturing segment since July 2012. The new division is contributing positively to the group's sales, accounting for about 7% of its FY12 total sales. With Globetronics turning to a full turnkey contractor since November 2012, we expect the sensor manufacturing and assembling division to contribute about 25% of the group's total sales in FY13.
Maintained BUY, RM2.08 FV. In view of its better-than-expected FY12 results, we are revising our FY13 revenue and net earnings upwards by 28.8% and 9.5% respectively. We continue to like Globetronics for its: (i) prudent management, (ii) strong balance sheet, (iii) consistently high
dividend payout, and (iv) ability to capitalise on the smartphone and tablet wave. We are maintaining our BUY call, with a higher FV of RM2.08, pegged to a higher projected FY13 EPS of 17.9sen based on its 5-year average PER of 11.6x.
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