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KUALA LUMPUR: Vitrox Corp Bhd
’s shares are trading in the red on Friday after the company reported a 34.6% drop in quarterly profit.
The electronics manufacturing services (EMS) provider slid six sen, or 0.83% to RM7.14 at 9.29 am. Year-to-date, the counter has fallen 6.7%.
ViTrox’s net profit tumbled 34.6% to RM33.2mil in the third quarter ended Sept 30 compared with RM50.8mil registered a year earlier.
Revenue for the quarter fell 19.2% to RM149.9mil against RM185.6mil while earnings per share slid to 3.52 sen from 5.38 sen a year prior.
In the first nine months to Sept 30 (9M23), ViTrox posted a net profit of RM103.9mil on revenue of RM432.7mil.
Hong Leong Investment Bank Research (HLIB Research) said ViTrox’s 9M23 core net profit of RM103mil (-27% YoY) missed expectations, accounting for 66% and 61% of the house and consensus full-year forecasts, respectively.
The deviation was due to a lower-than-expected top line. It said ViTrox’s bill-to-book ratio remained below parity and ended 3Q23 at 0.9 times.
“It anticipates that the global semiconductor industry may continue to face challenges throughout the remainder of 2023.
“The group maintains an optimistic outlook regarding the sustained growth in demand from AI, telco and auto sectors in the near future,” HLIB said.
The research house has upgraded ViTrox to “hold” from “sell” with a lower target price of RM6.70.
“While we like ViTrox’s technology leadership and asset-light business model, we do not expect demand to recover in the short-term as the supply chain continues to operate with excess capacity,” HLIB said.
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