KUALA LUMPUR: Globetronics Technology Bhd's share price jumped as much as 11.8 per cent in morning trade after it bagged a RM145 million contract to provide integrated circuit (IC) product packaging, testing, and backend services to Taiwan-based ChipMOS Technologies Inc.
Its share price reached an intraday high of 57 sen from Thursday's closing price of 54 sen.
As at 11.30am, the company's share price stood at 55.5 sen, with a market value of RM374.84 million.
Year-to-date, its share price has tumbled 65.3 per cent or RM1.05, this was mainly due to heavy selling in September after the resignation of its external auditor.
ChipMOS is listed on the Taiwan Stock Exchange and Nasdaq.
RHB Investment Bank research upgraded its call on the stock to a "Buy" with a new target price of 70 sen, on the news.
"We tactically upgrade the stock to a "trading buy" given the positive development and share price weakness may have reflected the negatives on the resignation of auditors, change of top management and ownership, as well as business strategy."
"However, the structural change in the company strategy and management remains a key risk," it said.
Other downside risks include further weakening of smartphone and peripheral sales; stronger ringgit vs US dollar; major product and/or customer losses, and major changes in the current management team.
"While we like the strategy to diversify into new products in search for growth avenue, execution and achieving optimal production yield in a new packaging platform would be key in this new development," it said in a note.