Latest news with #ViTrox
The Star
2 days ago
- Business
- The Star
ViTrox banks on AI for continuing growth
PETALING JAYA: Vitrox Corp Bhd continues to be a cautious bet despite an optimistic outlook for artificial intelligence-related solutions, analysts say. 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.
New Straits Times
6 days ago
- Business
- New Straits Times
HLIB downgrades ViTrox to 'Sell' on tax burden, valuation concerns
KUALA LUMPUR: ViTrox Corp Bhd's earnings outlook is clouded by rising tax burdens and stretched valuations, prompting HLIB Research to downgrade the automated test equipment manufacturer. The firm cautioned that the expiry of ViTrox's pioneer tax incentive could materially erode net profits going forward, highlighting it as a key de-rating catalyst. "The higher taxation was a negative surprise, following the expiry of ViTrox's pioneer status tax incentive on June 16, 2025, which limited the core profit after tax growth to 40 per cent, settling at RM37 million," it said in a note. HLIB Research downgraded its call to "Sell" from "Hold" previously with an unchanged target price of RM2.65 based on price-to-earnings (PE) ratio of 34 times based on projected earnings for the financial year 2026 (FY26). ViTrox's book-to-bill ratio normalised to 1.1 times from 1.3 times in the first quarter, reflecting the tapering of frontloaded orders ahead of US tariff changes. All segments recorded growth, driven by a 16 per cent expansion in automated board inspection (ABI) and a robust 59 per cent surge in machine vision system and test (MVST). Meanwhile, earnings before interest, taxes, depreciation, and amortisation (Ebitda) margins improved to 20 per cent from 17.5 per cent. Although the key segments posted strong growth and expanded Ebitda, foreign exchange losses and demand risks from tariff uncertainties continue to pose headwinds. "ViTrox maintains a cautious stance to capture anticipated demand recovery. "Ongoing, disciplined research and development investment will help the company stay technologically relevant. "However, foreign exchange volatility, higher reciprocal tariffs from the US and component shortages could weigh on its near-term margins," HLIB Research added, Despite a 40 per cent share price rally since April, HLIB Research argues that ViTrox's current valuation of price-to-earnings (PE) ratio of 48.5 times based on projected earnings for FY26 is excessive.
The Star
24-04-2025
- Business
- The Star
ViTrox posts 40% profit jump in 1Q25
KUALA LUMPUR: Vitrox Corp Bhd sees a positive long-term outlook for the semiconductor sector despite near-term geopolitical and trade headwinds. The electronics manufacturing services (EMS) provider said it expected robust double-digit growth in 2025, driven by the sector's pivotal role in generative AI, 5G, high-performance computing, medical devices, aerospace, and electric vehicles. 'We remain cautiously optimistic about the next six months and will continue to invest strategically in R&D to strengthen our leadership and capture emerging opportunities,' ViTrox said in the notes accompanying its financial results. In the first quarter ended March 31, ViTrox's net profit rose 40.2% to RM24.16mil, or 1.28 sen per share, while revenue expanded 18% to RM141.1mil. ViTrox said the increase in profit was mainly due to stronger revenue performance and a more favourable product mix. It attributed the revenue growth primarily to a recovery in demand for its machine vision system and automated board inspection segments.
