KUALA LUMPUR (July 24): Hong Leong Investment Bank (HLIB) Research has lowered its target price (TP) for ViTrox Corp Bhd to RM7.17, from RM8.43, on reduced earnings forecasts for the company, which manufactures automated vision inspection equipment for the semiconductor industry.

HLIB analyst Tan J Young wrote in a note today ViTrox’s core net profit of RM44 million for the first half ended June 30, 2020 (1HFY20) missed the research house's and consensus expectations.

"We reiterate 'sell' with a lower TP, reflecting our earnings cuts. Despite its technology leadership, its outlook is clouded by revived trade tension risk and the Covid-19 pandemic impact which may delay investment decisions and billings.

"ViTrox shared that it had yet to see any significant impact due to the Covid-19 outbreak and will focus on cost savings as well as business development initiatives,” Tan said. He said HLIB had cut its FY20 earnings per share forecast for ViTrox by 13% and 15% each for FY21 and FY22.

HLIB’s note today followed ViTrox’s financial results announcement yesterday.

ViTrox said in a Bursa Malaysia filing that its net profit fell to RM22.92 million for the second quarter ended June 30, 2020 (2QFY20), from RM24.39 million a year earlier, while 1HFY20 net profit was lower at RM43.99 million versus RM48 million.

Today, ViTrox’s share price had risen 15 sen or 1.5% to RM10.12 at 10.59am after trading between RM9.90 and RM10.14 so far. At RM10.14, ViTrox had a market value of RM4.71 billion.