HLIB said it will keep its FY25 forecast as management remains positive on the group’s outlook and financial performance for FY25.
PETALING JAYA: Analysts have not shifted their views on VS Industry Bhd
(VSI) despite its lower 2025 first-quarter results, which were dragged down due to the sharp foreign-exchange (forex) rate changes.
In a report, RHB Investment Bank Bhd said it will maintain its “buy” call with a target price (TP) of RM1.39, while adding the outlook for the electronics manufacturing services (EMS) provider is still exciting.
“The group’s job order prospects are positive, fuelled by the recovery in demand and new product launches lined up by key customers. We highlight the recent lifting of restrictions to manufacture Customer X’s floorcare products following its restructuring exercise under new management will open up more opportunities for VSI to secure more jobs,” RHB Research said.
It added that this meant a stronger relationship between VSI and Customer X, evident by the securing of two new models, with commercial production slated to begin by February or March 2025.
The renovation works in the Philippines are also on track and production is expected to commence in March or April next year.
“This should underpin VSI’s near-term earnings growth, with RM1.2bil worth of orders in hand and the expectation of another contract win by the first quarter of 2025,” it noted.
VSI’s first-quarter of financial year 2025 (1Q25) revenue dropped 4% to RM1.1bil, while its net profit dipped 38% to RM31mil.
Quarter-on-quarter, 1Q25 revenue and core net profit were 8% and 62% lower due to the abovementioned forex headwinds, a swing in seasonal demand and a change in its product mix.
RHB Research said the results will not alter its investment thesis – that its market share gains and beefing up its internal supply chain will drive the company’s medium-term growth prospects.
Hong Leong Investment Bank Bhd (HLIB) said it will keep its FY25 forecast as management remains positive on the group’s outlook and financial performance for FY25.
It said it will maintain its “buy” call on the group with a TP of RM1.42.
Meanwhile, Maybank Investment Bank Bhd said it is cautiously optimistic on the group’s outlook. “VSI is poised to benefit from growing sales orders driven by customers’ upcoming model launches. The conclusion of talks with a prospective customer could further boost earnings,” it said.
