ViTrox shares fall as 9MFY19 profit disappoints

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KUALA LUMPUR (Oct 25): ViTrox Corp Bhd's share price fell as much as 48 sen or 6% to RM7.59 so far today after the electronic component inspection equipment manufacturer reported cumulative nine-month net profit, which missed market forecast.

Analysts downgraded ViTrox shares against such sentiment. At 3:14pm, the counter was traded at RM7.60 among Bursa Malaysia top decliners. The stock saw 1.31 million shares transacted.

Yesterday, ViTrox said that for the third quarter ended Sept 30, 2019 (3QFY19), net profit fell to RM13.86 million from RM28.02 million a year earlier.

For the nine-month period (9MFY19), ViTrox said cumulative net profit dropped to RM61.86 million from RM76.04 million a year earlier.

Hong Leong Investment Bank Bhd analyst Tan J Young wrote in a note today ViTrox's 9MFY19 core net profit of RM62 million missed Hong Leong's and consensus estimates.

"In view of the underperformance, we cut our FY19-21 EPS by 18%, 20% and 19%, respectively. With more than 10% downside, we downgrade to SELL with a lower target price (TP) of RM6.17 (from RM6.40), reflecting our earnings cut," Tan said.

Meanwhile, KAF-Seagroatt & Campbell Securities Sdn Bhd analyst Shafiq Kadir wrote in a note today the research firm downgraded ViTrox shares to "Sell" from "Hold" but with a higher TP of RM7.10 from RM6.80 after trimming its ViTrox earnings forecast.

"We trim FY19-20F earnings by 8%-17% to reflect lower unit shipment assumption.

"ViTrox's 3Q19 earnings fell by 51% year-on-year on the back of weaker revenue, likely caused by the trade war and Huawei ban. 9MFY19 earnings came in under expectations, making up only 54%/56% of our/consensus' FY19F forecast," Shafiq said.

See also: ViTrox 3Q net profit halves on lower sales