FW: AmBank Research - V.S.Industry: PE derated amid lack of immediate catalysts BUY, 4 Apr 2018

 

 

STOCK FOCUS OF THE DAY

V.S.Industry: PE derated amid lack of immediate catalysts                            BUY

 

We maintain our BUY recommendation but cut our fair value to RM2.50/share (vs. RM3.00/share previously). We peg the fair value to a lower FY19F FD PE of 15x (previously 16x) given a lack of immediate catalysts for the company. Our FY18F-FY20F earnings are revised downwards by 4-11% to account for the consolidation of 2 assembly lines, which will subsequently be discontinued by end-CY18.

 

We came away from VSI's analyst briefing discouraged by several events and headwinds that the company is facing. We learned that the company plans to consolidate 2 of its assembly lines into 1 as the box-build volume of an older model shrank considerably. The model is likely to be discontinued by end-CY18, removing circa RM300mil revenue contribution annually (~6% to FY19F revenue).

 

Others :

Axiata Group: Expect moderate growth for earnings and dividends          BUY

IJM Plantations: To stabilise in FY20F                                                                       HOLD

 

 

 

STRATEGY

Global Markets: Tech Sector- Pockets of opportunities in tech stocks’ tumble

 

 

NEWS HIGHLIGHTS

UMW Holdings: Upping offer only way for MBM buyout to succeed

MyEG: Inks land deal with Johor Corp

EA Holdings: Fixes exercise price of warrants at 3.5 sen each

 

 

 

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