This article first appeared in The Edge Financial Daily on December 19, 2018

KUALA LUMPUR: In just a week, electrical and electronic products manufacturer VS Industry Bhd lost 51% or RM1.23 billion in market capitalisation as its share price tumbled to its lowest in over three years.

Yesterday, the group’s shares sank to as low as 63 sen after declining 19 sen or 23%, as the broader market retreated, after analysts highlighted concerns about the company’s earnings growth for the financial year ending July 31, 2019.

It eventually settled at 65.5 sen, down 16.5 sen or 20% in a day, which valued the group at RM1.18 billion. In contrast, the group had a market value of RM2.41 billion when it closed at RM1.33 on Dec 10.

VS Industry was Bursa Malaysia’s most actively traded stock yesterday, with 164.06 million shares done. The benchmark FBM KLCI, meanwhile, fell 6.31 points to 1,635.31.

Maybank Investment Bank Bhd analyst Ivan Yap wrote in a recent note that the research firm had lowered its target price for VS Industry to 82 sen from RM1.95, and downgraded its recommendation on the stock to “sell” from “buy”.

“1QFY19 core earnings were below our/consensus expectations due to losses at overseas ops (operations). However, the bigger concern lies in 2HFY19 whereby VS has received a decline in order flow from a key customer in Malaysia. Uncertainties beyond 1HFY19 prompt our FY19-FY21 cut in net profit forecasts by 42%-58%,” he said.

Bursa has noted VS’s share-trade dynamics. The bourse said in special announcements yesterday and on Monday that proprietary day trading (PDT) and intraday short selling (IDSS) of VS securities have been suspended as the last done price of the approved securities has dropped more than 15 sen or 15% from the reference price.

In its latest announcement yesterday, Bursa said: “The PDT and IDSS activities will only be enabled the following trading day (today) at 8.30am.”