SINGAPORE (Jan 6): RHB is maintaining its “buy” call on Global Invacom Group with a target price of 25 cents.

This comes even after the satellite communications provider in Nov 2016 issued a profit warning for FY16 saying it expected to report a net loss for the financial year, mainly due to one-off shutdown expenses for the closure of Radiance Electronics (Shenzhen).

Due to the one-off cost involved, the research house has trimmed its FY17F net profit after tax (NPAT) forecasts by 7%, but maintain that it still anticipates significant y-o-y NPAT growth ahead.

(See also: Global Invacom issues profit warning for FY16)

In a report on Tuesday, analyst Jarick Seet expresses confidence in the company bouncing back to profitability in FY17 due to higher margins and volumes expected from the upcoming deployment of its digital channel stacking system (DCSS) technology in Echostar’s Eastern Arc Twin Generation 2 Hybrid product.

(See also: Global Invacom poised to return to profitability)

He adds that Global Invacom’s customers have been giving “very positive feedback” on the company’s major changes over the past year, and says RHB is “impressed by the change in such a short period of time”.

“In fact, we understand that Skyware Global is already in talks with certain ex-key accounts to resume the supply of satellite dishes – which could significantly boost Global Invacom’s revenue and be positive for the company, especially in FY17,” says Seet.

“We firmly believe that Global Invacom’s turnaround is solidly in place, especially after our recent visit to SkyWare Global.”

Shares of Global Invacom are trading 1 cent higher at 16 cents.