Here’s how the Volkswagen cheating scandal will affect Innovalues

There will be more demand for hardware sensors.

Mainboard-listed precision machine parts and components manufacturer Innovalues may see bigger demand for auto hardware sensors after Volkswagen’s high-profile emission test cheating scandal.

A report by Maybank Kim Eng said that while direct impact from the VW scandal is expected to be minimal, the longer-term implications for Innovalues should be positive.

“We remain positive on Innovalues. We think its 30% retreat from its peak reached after 2Q15 results opens up a buying window. Furthermore, initial customer caution in 3Q after the tip-over in China’s auto sales since June should be waning as the industry and government respond with sales-boosting measures. We expect revenue growth to resume in 4Q, after a softer 3Q,” said Maybank Kim Eng.