GLOBAL INVACOM GROUP LIMITED
QS9.SI
Global Invacom Group - Cease Coverage
- Global Invacom Group (Ginva) has bounced back into profitability in 1Q17, driven by its US subsidiary and sales from its next generation of LNBs.
- With increased volumes and wider margins from its new-generation products that are to be incrementally sold throughout the year, we expect its revenue and margins to keep on improving. This is as the company continues to roll out new-generation equipment.
- However, we are ceasing coverage on this counter due to internal resource reallocation, coupled with the low institutional interest of the stock. Our previous recommendation was BUY, with a SGD0.26 TP.
The Company
- Global Invacom Group (Ginva) is an investment holding company that engages in the research & development (R&D), design, and supply of integrated satellite communications equipment in the US, Europe, Asia, and internationally. Ginva was founded in 1985 and is headquartered in Singapore.
Bouncing strongly back to profitability.
- The company reversed a USD700,000 loss in 1Q16 when it booked a USD600,000 NPAT in 1Q17. This was driven by its US subsidiary, which designs and manufactures antennas for broadband networks and satellite broadcast TV.
- Sales from its next generation of low noise blocks (LNBs) have also commenced, as global broadcasters have begun to transition to the latest digital channel stacking (DCSS)-based solutions.
- Ginva’s GPMs have increased to 21.9% when compared to the 18.5% recorded in the previous year. This was helped by ongoing manufacturing efficiencies and, specifically, at Global Skyware in the US. Lower R&D costs – due to the weakened GBP – helped costs in the UK.
Jarick Seet
RHB Invest
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http://www.rhbinvest.com.sg/
2017-12-22
RHB Invest
SGX Stock
Analyst Report
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