Affin Investment Bank raised its target price for Globetronics Technology Bhd to 2.11 ringgit per share from 2.02 ringgit, citing the electronics company's growing involvement in the smart phone sector and its strong management team.
Globetronics is on track for stronger revenue and earnings, especially after it won a key contract to make sensor products for a Swiss client recently, Affin said in a research note on Thursday.
"As its sensors business develops, we believe that they could likely lead to further product spinoffs, not merely from its existing customer, but also potentially from new customers," it said.
"We thus believe that this is the first step in Globe transitioning from a smallish company into a potential heavyweight in a niche market segment," Affin added.
The company's dynamic management has been able to identify new key business areas to drive growth and its dividend yield is at an above average 10 percent, Affin said, reiterating its "buy" call on the stock.
At 1009 (0209 GMT) Globetronics was trading down 0.01 ringgit at 1.57 ringgit per share while the KLSe composite index was up 1.22 points at 1691.5.
(Reporting by Siva Sithraputhran in Kuala Lumpur; Editing by Anupama Dwivedi; Siva.Sithraputhran@thomsonreuters.com; +603 23338019; Reuters Messaging: email@example.com)