ViTrox to benefit from higher demand for tech
KUALA
LUMPUR: Vitrox Corporation Bhd (ViTrox) is expected to benefit from higher semiconductor backend demand but analysts also caution about near term uncertainties brought on by the Coronavirus Disease 2019 (Covid-19) pandemic.
“We like ViTrox as we believe that its leadership in machine vision system (MVS) and automated board inspection (ABI) business units, and focus on product innovation to strengthen its product offerings will benefit from the adoption of technological megatrends aforementioned. However, we are cautious in the near term due to uncertainties relating to the Covid-19 pandemic as well as the US-China trade war,” the research team at AmInvestment Bank Bhd (AmInvestment) said in a report.
It pointed out that ViTrox could benefit from higher semiconductor back-end demand riding on the adoption of 5G, artificial intelligence (AI) and Industry 4.0 developments.
As such, it expected the group to register net profits of RM101 million, RM120 million and RM142 million respectively in FY20F to FY22F, representing earnings growth of 26, 19 and 18 per cent year-on-year (y-o-y) respectively.
“ViTrox is principally involved in the development of 3D and line scan vision inspection system and systemon-chip embedded electronic devices for the semiconductor and electronics packaging industries,” AmInvestment noted.
As at FY19, it said the group has 504 customers where 73 per cent of its products and services are exported to more than 40 countries in the world with applications in customer segments such as telecommunication, automotive, mobile devices, computing, consumer, industrial and medical.
“After a weaker 1HFY20 impacted by the effects of the virus pandemic, we are optimistic of a gradual earnings recovery in 2HFY20 supported by a robust pipeline for its key business units. Growth will be underpinned by Taiwan and China while other regions see a comeback in orders after being hit by Covid-19 uncertainties,” it said.
AmInvestment pegged a ‘hold’ call on the stock.