Global Invacom set for profitability rebound: analysts

Thanks to new products and robust utilisation rate recovery.

Global Invacom (Ginva) is on the path for a rebound into profitability, according to a report by RHB. The company’s FY16 looks more and more hopeful thanks to a combination of a pipeline of new products, a robust utilisation rate recovery, labour costs savings, and merger synergies.

Currently, the company is working on a range of new products on both its low noise block and fibre product lines, most of which are set for mass production in 2016. For instance, Ginva has sent and developed samples of a new generation network product model for its customer DISH Network Corp.

Ginva’s utilisation rate also recorded a robust recovery to 70-80% as clients resumed orders in August. With less than half of product volume coming from its Shanghai factory, RHB believes that the pick-up of utilisation is setting the stage for a potentially positive Q4.

Further, the company is finally reaping the rewards of its Shanghai factory’s investment in automation for the past two years. It expanded its engineering team to produce customised equipment designed to optimize quality and yields, which in turn has led to significant labour costs savings. This is evidenced by worker numbers tapering to 400 now from 700 two years ago.

All these factors combined with merger synergies with Skyware Global, RHB asserts that Ginva definitely has the potential for turn-around in the upcoming financial year.