Stock With Momentum: Vitrox

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This article first appeared in The Edge Financial Daily, on november 24, 2015.


Vitrox Corporation Bhd (-ve)

VITROX (Fundamental: 3/3, Valuation: 1.5/3) triggered our momentum algorithm for the first time yesterday, rising 7.5% to close at RM3.28.

Last Thursday, the company released its 3Q2015 results. Revenue grew 1.4% y-y to RM40.1 million while net profit expanded an outsized 38.1% to RM15.7 million, mainly due to higher unrealised forex gain on stronger USD.

For the cumulative 9M2015, revenue fell 11.9% y-y to RM112.2 million, while net profit declined 1.0% to RM35.0 million, cushioned by net forex gains of RM15.3 million despite higher tax expense. At end-September, net cash stood at RM55.0 million or 23.6 sen per share.

The Penang-based company is involved in the development and manufacturing of automated and digital vision inspection systems, serving the back-end semiconductor test, bare printed circuit board, and printed circuits assemblies industries. Export, mainly to Taiwan (25%), China (16%), and Mexico (10%), accounted for 71% of its revenue in 2014.

The stock trades at a trailing 12-month P/E of 14.6 times and 3.5 times book.