Innovalues

Innovalues: CIMB hosted an NDR. Questions were focused on the automotive and sensor market, supply chain for tier1/2 clients, margin expansion and fallout from the Volkswagen scandal.

On sensors, usage of sensors in a car was 30-40 five years ago, it is about 60-100 today, based on an industry source, and could go up to 200 in the future. The level of sensor usage in high-end brands are higher than in basic models.

Given Innovalues is able to offer quality products and competitive pricing, CIMB thinks Innovalues could secure higher market share for key clients like Sensata. This is because customer relationship with companies like them takes about 1.5-2 years and numerous rounds of testing to be qualified.

On Volkswagen exposure, the house notes that direct revenue contribution remained insignificant at less than 1%.

But for now, the house does caution of a slightly softer 3Q15, but they keep their Add rating and $0.93 TP intact.