ViTrox shares hit all-time high on solid earnings, record 3Q revenue

ViTrox shares hit all-time high on solid earnings, record 3Q revenue
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KUALA LUMPUR (Oct 23): ViTrox Corp Bhd's was the top gainer in the morning session on Bursa Malaysia today, climbing to an all-time high after posting a 114% jump in net profit in its latest quarterly results. 

ViTrox's share price rose to its all-time high of RM14.68, up by 5.31% or 74 sen. At 11.15am, the counter had pared some gains, still up 42 sen or 3.01% to trade at RM14.36, albeit with a thin trading volume of 78,500 shares. 

The latest share price valued the stock at RM6.58 billion. 

ViTrox told the exchange yesterday that its net profit for the third quarter ended Sept 30, 2020 (3QFY20) leapt 114% year-on-year (y-o-y) to RM29.71 million, from RM13.86 million for the previous corresponding quarter, as its quarterly revenue soared to a record high of RM123.75 million, boosted by a strong sales volume and optimisation of its production capacity.

Its cumulative nine-month (9MFY20) net profit was up by 19.14% y-o-y at RM73.7 million from RM61.86 million for the previous corresponding nine-month period. Cumulative earnings per share (EPS) grew to 15.63 sen from 13.14 sen for 9MFY19. Meanwhile, revenue for 9MFY20 also increased 27% y-o-y to RM310.59 million from RM244.5 million for 9MFY19.

In a research note today, AmInvestment Bank Bhd said ViTrox’s 3QFY20 results were in line with expectations, recording a core profit of RM30 million, bringing its 9MFY20 core profit to RM77 million, after excluding an RM4 million exceptional loss from net inventories written down. The results accounted for 77% of the research house's full-year forecast and 74% of the consensus estimate.

“We continue to like ViTrox due to its leadership in the machine vision system (MVS) and automated board inspection (ABI) segments, alongside its key merits of market diversification efforts targeting high-growth regions such as Taiwan and China, and its focus on product innovation and improvement in lead time to strengthen its portfolio offerings. 

To recap, for the first half ended June 30, 2020 (1HFY20), MVS and ABI accounted for 40% and 58% of the group’s revenue respectively, it added. 

Nonetheless, AmInvestment Bank Research retained its "hold" rating of the stock, with an unchanged fair value (FV) of RM10.56, and said it deems that the stock is fairly valued at the current share price.

The research house said its FV is pegged at 35 times FY22 price-earnings ratio (PER), representing a slight premium above its benchmark target PER for large-cap automated test equipment (ATE) players of 33 times, given the group’s technology leadership and higher market capitalisation.

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Surin Murugiah