GTRONIC (7022) - (Globetronics) Extremely Rich Valuation







 
Globetronics is principally involved in manufacturing of semiconductors and LEDs products.
 
Based on market cap of RM1.74 billion and FY2016 net profit of RM25 mil, historical PER is a shocking 69 times.
 

 

 
The following is earning projection by Affin Hwang Capital :-
 

(Source : Affin Hwang)
 
Affin expects FY2017 revenue to double from RM215 mil to RM436 mil while net profit increased from RM26 mil in FY2016 to RM77 mil and RM113 mil in FY2017 and 2018 respectively (!!!!!). The bullish earning projection is based on assumption of strong performance of light sensor division which is expected to come onstream in second half of FY2017.
 
Based on existing price of RM6.10, FY2017 and 2018 forward PER is 23 times and 15 times respectively.
 
Conclusion
PER too high. AVOID.


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