GTRONIC

[winston]

not vested

Trading Buy: GTRONIC - 7022
Light before the dawn
(Last price: RM2.40, Potential upside +20.8%)


Company Profile

GTRONIC is an Outsourced Semiconductor Assembly and Test (OSAT) provider of integrated circuits, chip carrier quartz crystal products, optoelectronic products, small outline components, light emitting diode (LED) components and modules, sensors and optical products, electronics/semiconductor components and technical plating services.


Trading Catalyst

From a low of RM2.02 (1 Nov) after reporting a weak 3Q19 results, GTRONIC rebounded 19% to RM2.40 last Friday, as investors are likely to price in a flattish 4Q19 results and look forward to stronger FY20/21 prospects, led by the ramp-up of new and better margins laser headlamp products and gesture sensors coupled with new sensors for various applications

GTRONIC is trading at 24.7x FY20E (8% above its peers and 18% below its 5Y mean), supported by decent 3.3% DY (44% above its peers) and a strong 24% FY19-21 EPS CAGR coupled with RM0.18 net cash.

Technically, GTRONIC’s uptrend is intact to advance towards RM2.48/2.68/2.90 levels following recent ascending triangle breakout.

Technical View
Resistance: RM2.48 / RM2.68 / RM2.90
Support: RM2.30 / RM2.20
Cut loss: RM2.18

Key Financial Stats
Trading at 24.7x FY20E, supported by decent 3.3% DY and a strong 24% FY19-21 EPS CAGR coupled with RM0.18 net cash.

Source: Bloomberg, HLIB