KUCHING: Globetronics Technology Bhd (Globetronics) and Inari Amertron Bhd (Inari) are pegged to be key beneficiaries to Apple’s iPhone ‘supercycle’.
According to AllianceDBS Research Sdn Bhd (AllianceDBS Research), Apple reported a good set of numbers for its December quarter results last week, with iPhone sales achieving 78.3 million units that is ahead of consensus estimate of 77 million units.
“Its March quarter guidance implies 50 to 51 million of iPhone shipment which is better than expected and should ease concerns over potential severe order cut for suppliers,” the research house said, adding that iPhone’s average selling price (ASP) also fared well, driven by better mix and stronger sales of the Plus model.
AllianceDBS Research noted that the better sales mix sends an encouraging message that iPhone demand remains buoyant and is relatively price inelastic (despite forex headwinds) as long as there are new differentiation features to entice buyers (such as the dual rear camera).
The research house interpreted this as a good sign for iPhone 8 sales where several new features will be introduced along with potential bundling of the AirPods as a standard accessory, particularly for the premium OLED screen model.
This reaffirmed the research house’s favourable view on iPhone supply chain over the next 12 months. AllianceDBS Research believed that investors will look beyond the first half of 2017 (1H17) and start to focus on the iPhone 8 ‘supercycle’, for which the research house thought Globetronics and Inari are well-positioned.
Based on its analysis, the research house believed Globetronics’ gesture sensor and light sensor will likely find their way into Apple new products in 2017, therefore driving a strong recovery in earnings after the disappointments in 2016.
“The risk-reward is still positively skewed for Globetronics (though not as much as before) with potential valuation upside, and we see Globetronics crossing the hurdles once it starts the mass production of those sensors by May/June. For Inari, higher unit sales are positive for its radio frequency (RF) division which could be further driven by additional content gains in new smartphone models.
“We believe its new testing division should also be ramping up nicely in 2017, supported by equipment consignment activities from Broadcom. Beyond that, there are also new business opportunities from Osram, but it is still early days to pinpoint the potential revenue contribution to Inari at this point of time,” AllianceDBS Research said.