RHB Investment Bank Bhd (RHB Research) has upgraded its recommendation for Globetronics Technology Bhd from NEUTRAL to TRADING BUY after the integrated circuit (IC) provider entered into a three-year service agreement with ChipMos Technologies Inc worth RM145 million.
This partnership reflects a shift in strategy to seek new growth avenues for Globetronics as Globetronics anticipates earnings contributions of RM2 million to RM6 million annually from FY25 to FY27, assuming an 8%-10% net margin, as production ramps up in the second half of 2025.
The recommendation upgrade by RHB Research also reflects the potential upside from the partnership amid recent challenges, including the resignation of auditors, management changes and restructuring efforts.
However, RHB Research remains cautiously optimistic about Globetronics' structural shifts but highlights risks such as weak smartphone and peripheral sales, adverse foreign exchange movements, customer or product losses and further management instability.
Despite these uncertainties, the positive trajectory of the new partnership suggests a promising turnaround for the company.
RHB Investment Bank Bhd (RHB Research) has upgraded its recommendation for Globetronics Technology Bhd from NEUTRAL to TRADING BUY after the integrated circuit provider entered into a three-year service agreement with ChipMos Technologies Inc worth RM145 million.
This partnership reflects a shift in strategy to seek new growth avenues for Globetronics as Globetronics anticipates earnings contributions of RM2 million to RM6 million annually from FY25 to FY27, assuming an 8%-10% net margin, as production ramps up in the second half of 2025.
The recommendation upgrade by RHB Research also reflects the potential upside from the partnership amid recent challenges, including the resignation of auditors, management changes and restructuring efforts.
However, RHB Research remains cautiously optimistic about Globetronics' structural shifts but highlights risks such as weak smartphone and peripheral sales, adverse foreign exchange movements, customer or product losses and further management instability.
Despite these uncertainties, the positive trajectory of the new partnership suggests a promising turnaround for the company.
