KUALA LUMPUR (April 26): Shares in ViTrox Corp Bhd fell to their lowest in a month, as first-quarter results disappointed investors, while analysts turned increasingly cautious on the semiconductor company’s near-term prospects.
ViTrox fell as much as 6% before ending the day at RM7.40, its lowest since March 26, 2024. The stock was still down a little under 3% at the closing bell after 5.29 million shares changed hands. In contrast, the country’s benchmark index FBM KLCI was 0.4% higher.
Net profit for the financial quarter ended March 31, 2024 (1QFY2024) announced on Thursday accounted for only 9% of consensus’ full-year estimate for 2024. At least one research house has downgraded the stock.
“We believe the near-term positive prospects have been priced in following its recent share price recovery,” said UOB Kay Hian and cuts its rating to "hold" from "buy".
Shares of ViTrox peaked in February with nearly 8% gain, tracking peers in the sector as investors bet on upcoming technology upcycle, even as the company that mainly provides automatic vision inspection equipment in the semiconductor and electronics industries reported several weak quarters.
There are now four "hold" calls, two "sell" ratings, and five "buy" recommendations following UOB Kay Hian’s rating change. The consensus’ 12-month target price is RM7.95, according to Bloomberg.
“We do not expect demand to recover in the short term as the supply chain continues to operate with excess capacity,” said Hong Leong Investment Bank which has the stock on "sell" call.
On Thursday, ViTrox said its net profit nearly halved year-on-year to RM17.23 million, primarily due to unfavourable product mix and higher research and development expenditures to support the introduction of new products.
Revenue declined 10.3% to RM119.61 million from RM133.33 million, due to softer demand for its automated board inspection. Earnings per share fell to 1.82 sen from 3.49 sen for the quarter under review.
“Despite a broad-based recovery in semiconductor front-end utilisation materialising at wafer fab level, it is evident that stubborn time lag differentials still persist within the key sectors automotive, industrial, telecommunications that ViTrox has significant exposure to,” said Maybank Investment Bank.
On its part, ViTrox remains optimistic that the global semiconductor industry will pick up momentum gradually and demand from artificial intelligence, telecommunications, and automotive sectors will see sustained growth in the near future.
“The group continues to focus on pursuing new opportunities through product innovation, enhancing customer services and exploring new markets coupled with tight cost control measures to stay competitive and resilient in the global market,” it said.