Founder & Executive Chairman’s Message Print E-mail

MichaelNg_Message

On behalf of Globetronics Technology Bhd Board of Directors, Management & Staff, it is indeed my honour and pleasure in delivering our Group’s Financial Year-2016 Annual Report to all of our beloved shareholders and stakeholders alike.

Financial year (FY) 2016 can best be summarized as “a year in transition” or “a metamorphosis year” for our Group - Globetronics Technology Bhd (GTB). It had been a year where most of our Group’s major product platforms were transitioning from their matured platforms into their next-generation platforms. All through most of FY2016, our Group invested a tremendous amount of developmental and human resources into “Making Globetronics Great Again” -- results of which should be gloriously evident by the middle of FY2017.

In spite of the year-long “incubation” period required by these next generation product platforms to be adopted into new applications, GTB still managed to generate an acceptable set of financial results for FY2016, with profit-after-taxation (PAT) of RM25.7million while matching FY2015’s record dividend payout of RM64.8million to our shareholders – a whopping 252% ratio of dividend payment over net profit for FY2016!!

On the other hand, largely due to the market’s and investors’ disappointment with the delays in the launch of our new product platforms, in spite of >30 meetings/road-shows conducted by our CFO (Kok Choon) and Corporate Director (Kok Yu) with fund managers and investment bankers, our Group’s market capitalization dropped approximately 41% from its peak of RM1.8billion down to approximately RM1billion over FY2016. The bright side though was our Group’s strong cash flow position which ended FY2016 with RM166million (2015 : RM178million). This strong cash flow position will allow us to invest approximately another RM60million in capital expenditure (Capex) in the first half of FY2017 for new sets of equipment and facility upgrades to mass produce most of our new product platforms by mid-2017.

As we move in line with the global trend toward business sustainability, we started to enhance our activities beyond community and philanthropy works towards addressing key areas of interests like balanced work life, effect of emissions on climate change, supporting the local supply chain, etc that would ensure business sustainability now as well as for the future generations to come. While we continue to achieve material compliances with mandatory statutory requirements stipulated by Bursa Malaysia, Securities Commission, CCM, IRB and MASB, our CEO remained active/effective in playing our strategic roles towards serving our governmental and quasi-governmental organizations in attracting strategic foreign direct investments into Malaysia & Penang, and indirectly benefitting Globetronics in the long run. Our Board of Directors have also been proactively and diligently updating themselves in all the latest introductions of Corporate Governance, Bursa Malaysia’s listing requirements, etc through our Group’s continuous education program to all board members as well as in their individual participation of courses conducted through Bursa Malaysia.

In closing, it is imperative for me on behalf of our board of directors in conveying our heartiest gratitude to our 7-star-CEO as well as each and everyone of our workforce fortheir selfless dedication and unmatchable contributions inpaving such a powerful set of business and technological foundation for the Group throughout FY2016 in preparation for another stellar and successful FY2017. Our Management team would also like to convey our heartfelt gratitude and sincerest appreciation to all our Board members for their meticulous guidance and timely motivation provided to our Management team in bringing the very best out of our Group throughout these past years. Last and not least, we would like to thank all our shareholders, investors, business partners and supporters for your unfailing support and encouragement to our team through all these years!

Thank you all very much.

CSR_2016

As we move in line with the global trend toward business sustainability, we started to enhance our activities beyond community and philanthropy works towards addressing key areas of interests like balanced work life, effect of emissionson climate change, supporting the local supply chain, etc that would ensure business sustainability now as well as forthe future generations to come. We have formed a team to drive the concept of sustainability to the organization,where multi department groups would identify and report on the areas that are important to the company. This teamwould report to the Audit and Risk Management Committee on a periodic basis with the end in mind of embeddingsustainability into all areas of decision making in the organization. We are pleased to report that business sustainability audits have also been one of our key customers’ audit process on our Group. The most recent sustainability audit doneby our customers was in the last quarter of FY2016 on Workplace Condition and Assessment (WCA), to ensure goodworking conditions of our manufacturing facilities, wellness in treatment of employees with reasonable working hours,satisfactory benefits, fair promotions within our Group’s conducive working environment. Anti-corruption & whistleblowing policies have been part of the auditors’ due diligence checklist on our Group.

Our Group’s Board of Directors have also been exemplarily in being continuously educated and updated on allCorporate Governance and Bursa listing requirements and in overseeing material compliances of our Group with mandatory statutory requirements stipulated by Bursa Malaysia, Securities Commission, CCM, IRB and MASB. Openand regular communications were carried out with investors, shareholders and supporters through the Annual General Meeting and more than 30 meetings / roadshows with fund managers and analysts both locally and abroad throughout FY2016.

Our Group’s CEO (Dato’ Heng) had continued to play an active and strategic role in Penang Free Trade Industrial Zone (Frepenca) and in supporting InvestPenang in addition to serving our governmental and quasi-governmental organizations in attracting strategic foreign direct investments into Malaysia & Penang all of which should directly and indirectly benefit technology companies in Malaysia including GTB.

PROSPECTS & OUTLOOK

It is really not that difficult nowadays to feel the stunning intrusion of technological advances into our lives at such breakneck speed as we have never experienced before. Needless to say, the speed of new innovations will accelerate !

Acronyms and terminologies like IoT (internet-of-things), VR (virtual reality), AI (artificial intelligence), augmented reality, drones & autonomous cars, etc have become daily buzz words and winning strategies for successful and leading technology companies of today. IoT in particular promises to connect a whole new set of devices to the cloud via the sensors on the ground to servers in the cloud as enabling technology that can help transform individual lives, as well as enterprise technologies.

One of our Group’s key business platforms happen to be heavily involved in the co-development and manufacturing of sensors for various products that go into the IoT, VR, AI applicatons including the latest smart phones and mobile devices in the market today. Another key business platform within our Group manufactures crystals and timing devices which are embedded in vehicles, smart phones, PCs, digital cameras and a vast range of other electronic which require outstanding accuracy and stability. Our LED-business-platform is engaged in the co-development of laser automotive headlamp as well as the UV-LED for the healthcare and industrial applications. Without a shadow of a doubt, these are all necessary and integral parts of the products of our future for many years to come.

Of course there are also other co-developmental activities which are in our Group’s roadmap for the next couple of years, some examples of which would include next generation imaging products, sensors targeting peripherals for smart phones and smart devices, infra-red reflectors as new security system for smart phones, etc.

Looking ahead, we are confident and optimistic of our prospects as we head into Year 2017 and beyond. After many months of intense focus and hard work on a multitude of fruitful and successful co-developmental works for the new generation sensors, crystals & timing devices and LED-based products, we believe we are in a very good position to mass produce most of these co-developed products by the middle of FY2017 and beyond!! Our Group has already committed and will be spending up to RM60million in Capex in the first half of FY2017 alone to cater for the manufacturing needs of these requirements based on our customers’ projected volume ramps. In all likelihood, our Group will invest additional Capex beyond the RM60million during the second half of FY2017.

In short, it is imperative for me to stress that while FY2016 had been a relatively soft and challenging year for our Group, it was an extremely productive and critically important year in which our Group successfully codeveloped excellent products/components with our customers particularly for the upcoming smart and mobile devices & IoT-devices. We are now all set and ready to recapture our Glorious Days of FY2015 by end of FY2017 and through FY2018!