ViTrox banks on AI for continuing growth
Last week, ViTrox, a maker of automated vision inspection equipment and system-on-chip embedded electronics devices for the semiconductor and electronics packaging industries, reported results for the second quarter of this year (2Q) that met market expectations.
CIMB Research has maintained a 'hold' call on the stock with an unchanged target price of RM3.80 based on price-earnings multiple of 40.8 times for next year, broadly aligned with the domestic automated test equipment industry's five-year average.
'Our valuation reflects a more optimistic outlook for the electrical and electronics sector.
'It is underpinned by ViTrox's solid AI-related order pipeline and regional diversification, which continue to support earnings visibility,' it said.
Taiwan, Malaysia, and Vietnam contributed one-third of revenue in the first half of this year (1H25), up from 24% in 1H24.
CIMB Research said the company's management 'is optimistic about securing pioneer status tax incentives in 2H25, supported by multiple new product introductions slated for rollout in 2H25.
'Notably, ViTrox has commenced shipments of its next-generation AXI system under the QX Series, designed for artificial intelligence servers, telecommunications, and automotive vision inspection,' it added.
Maybank Investment Bank (Maybank IB) Research said a briefing with the company's management reaffirmed the company's growth trajectory for 2H25.
The company highlighted robust demand across all core segments.
'Despite macro noise, management noted that 2Q25 growth was not solely frontloaded from US tariffs, with 3Q25 already seeing continued order inflows,' Maybank IB said.
The research house maintained a 'hold' call on the stock but with a higher target price of RM4.11 from RM3.89.
This is on a 6% rise in earnings for FY26 to FY27 based on better demand.
While the company expects the tax incentives to be granted by either 3Q or 4Q, higher tax provisions would remain a near-term drag.
'While we are positive on ViTrox's fundamentals and market positioning, valuations are increasingly demanding, trading at a premium to its peers, likely pricing in a full demand recovery,' the research house pointed out.
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