V.S. Industry rises 12.0% on strong 1Q performance

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KUALA LUMPUR (Dec 18): V.S. Industry Bhd jumped by as much as 26 sen or 12.0% as at 10.45 am this morning, before paring gains to RM2.41, with some 504,000 shares traded.

The manufacturer and assembler of plastic-molded and electronics parts posted a rise in net profit of almost three fold to RM35.22 million in the first quarter ended Oct 31, 2014 (1QFY15) from RM9.56 million a year ago.

This is attributable to higher sales and better sales mix contributed by its Malaysian operations.

This stronger sales was reflected by a rise in revenue by 24.5% to RM544.56 million from RM437.26 million in the previous corresponding period.

The company also proposed an interim dividend of 3 sen per share.

RHB Research in a note today maintain its “Buy” rating of V.S. Industry, as earnings were above expectations, largely contributed by Keurig coffee machines.

“We maintain our buy call with a revised RM2.95 target price (from RM2.92), which is based on a recurring FY16F P/E of 10x,” said RHB analyst Fong Kah Yan in the report, adding that EBIT margin also expanded from higher utilisation rate and improved product mix.