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PR Newswire
24-10-2024, 02:26 PM
If you are a tech company, being winners for many years may not be enough to have a sustainable future. Just think of Nokia, Yahoo and Blackberry and you can understand what I mean.
In the Bursa Malaysia context, we are seeing this playing out for Globetronics. The company was founded in the 1990s and for the first 2 decades, it was considered a fundamentally sound stock with good returns. Unfortunately the company experienced declining performance over the past 12 years. Globetronics’ revenue decline is in contrast to the growing revenue from the global semiconductor industry.
Globetronics needs a turnaround. But it is more than improving efficiency or productivity. It is about developing products that will generate good demand when the products come on stream in the next 4 to 5 years. The Group seemed to have been able to do this new product development process a decade ago. Somehow it lost this edge. If it fails to rediscover this product development mojo it will not be an investment opportunity but a value trap.
In the Bursa Malaysia context, we are seeing this playing out for Globetronics. The company was founded in the 1990s and for the first 2 decades, it was considered a fundamentally sound stock with good returns. Unfortunately the company experienced declining performance over the past 12 years. Globetronics’ revenue decline is in contrast to the growing revenue from the global semiconductor industry.
Globetronics needs a turnaround. But it is more than improving efficiency or productivity. It is about developing products that will generate good demand when the products come on stream in the next 4 to 5 years. The Group seemed to have been able to do this new product development process a decade ago. Somehow it lost this edge. If it fails to rediscover this product development mojo it will not be an investment opportunity but a value trap.