We
have a results review note on ViTrox.
Results
Review: ViTrox Corporation (VITRO MK; BUY; TP: MYR4.05) - First step to another
record year
- All-time-high 1Q core earnings of MYR10m (-24% QoQ, +139% YoY) equates to 16% of ours and consensus full-year forecasts, in line considering a seasonally weaker quarter from slower demand for semiconductor capital equipment.
- A play on replacement cycle of inspection equipment & strengthening USD. We take comfort in ViTrox’s improved earnings visibility riding on the necessary upgrades and replacement demand for AXI equipment used for server farm expansion which will power growth in cloud computing. As such, we expect stronger 2Q15 earnings led the ABI division and sustained positive USD exposure.
- Valuation remains undemanding. Despite a 38% upswing in share price since our initiation (dated 27 Jan 2015), we remain positive on this stock. There is upside bias to our earnings forecasts while valuations are still undemanding at 12.1x CY16 PER vs global peers’ 14.7x CY16 PER.
Maintain BUY with an unchanged
MYR4.05 TP (13.5x CY16 PER). There will be a post-results analyst briefing this
morning.
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