STOCK FOCUS OF THE DAY
V.S. Industry : Very strong growth ahead Buy
We reiterate our BUY recommendation on VS Industry (VSI) with a higher fair value of RM2.85/share (previously RM2.30/share) after raising our net profit forecasts for FY18F-FY19F by 9-19% and rolling forward our earnings base to CY18F. We have also attached a higher PE multiple of 15x (14x previously) to capture potential jobs to be awarded in FY19F.
We came away from VSI's company visit at Johor feeling upbeat due to the company's impressive prospects in FY18F and FY19F. We gathered that additional lines were installed in mid-July and are fully operational. In addition, management guided that more lines are coming onstream in Oct-Nov 2017, thus our earnings upgrade. We like VSI because: i) of its association with Customer X which enjoys robust growth prospects due to its product innovation; ii) it is a home-grown world-class electronic manufacturing services (EMS) player; and iii) its strong profit growth in FY17F-FY19F underpinned by capacity expansion.
Others :
Yinson Holdings : Sailing ahead on a tailwind Buy
Bumi Armada : Unchanged valuations despite Kraken’s first offload Hold
FBM KLCI Outlook : 1,795 resistance level may be tested soon
STOCK ON RADAR
Luxchem Corporation, Rev Asia, Ajinomoto, Power Root
ECONOMIC HIGHLIGHT
Malaysia – SMEs expected to benefit from strong retail sales
NEWS HIGHLIGHTS
CAB Cakaran : To set up poultry abattoir in Singapore
Enra : Eyes RM1b upstream jobs
Puncak Niaga : Gets SC approval to buyTRIplc
Datasonic : Sets plans to tap Africa
DISCLAIMER:
The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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