Stock Name: VITROX
Company Name: VITROX CORPORATION BHD
Company Name: VITROX CORPORATION BHD
| Research House: HLG | Price Call: HOLD | Target Price: 0.82 |
ViTrox (HOLD)
4Q11 Results: Below Expectations
- FY11 reported core net profit of RM22.2m came in below expectations,accounting for 83.1% of our full-year forecast and 83.3% of consensus chieflydue to the disappointing sales performance.
- The decrease in revenue mainly due to reduction in sales from all threeproduct segments, whereby MVS, ABI and ECS recorded a contraction of 58%, 24%and 73% yoy respectively.
- ViTrox attributed this weak sales performance to the slowdown insemiconductor and electronics industry as a result of European financial debtcrisis and sluggish USeconomy.
- Our target price is revised downward to RM0.82 (from RM0.85 previously)based on DCF with a WACC of 13.4% and TG of 0%. This gives ViTrox an impliedPER of 6.5x for FY12. We maintain our HOLD call on the equity although there isa slightly higher than 10% potential total return given our cautious view ofits profitability in 1H12 and pending further guidance from the analystbriefing.
Source: HLIB Research 29 Feb 2012
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