KUALA LUMPUR (Aug 23): Shares of Notion VTec Bhd (KL:NOTION) plummeted on Friday to their lowest in three months in highly active trade as investors reacted to bleak earnings guidance.
Notion VTec fell as much as 28.8% or 39.5 sen to 97.5 sen, its lowest since May 21, 2024. The sharp decline also triggered a temporary suspension in intraday short selling of the stock for the rest of the day. The counter was trading at RM1.07 at 11.25am, on course for the fifth consecutive session of decline.
Trading volume was also the highest on Bursa Malaysia at 78.42 million shares so far — and more than seven times the 200-day moving average. At its last price, the company has a market capitalisation of RM556.26 million.
A fund manager who attended Notion VTec’s recent investors briefing told The Edge that the company flagged negative foreign exchange hedges which could drag down its earnings in the coming quarter ending September 2024 (4QFY2024).
The plunge in share price is highly related to bursts of trading limits on stock warehousing accounts, a market watcher said. Certain investment banks had tightened credit limits on the stock and required cash upfront to trade the stock following discovery of large exposure of margin trading.
Technology stocks also declined on Friday with the Bursa Malaysia Technology Index, which tracks 49 stocks in the sector, down nearly 3%. Nasdaq Composite also slid overnight.
Shares of Notion VTec are still up by nearly 240% year-to-date, boosted by a turnaround from record-high losses in FY2023 and recent surge in earnings.
A check on the company’s shareholdings shows it was mostly owned by retail investors with no institutional funds among the top 30 largest shareholders.
Two analysts cover Notion VTec and both have ‘buy’ calls on the stock. Hong Leong Investment Bank has a target price of RM3.28 while Nomura Research’s target price is RM3.51.
Earlier this month, Notion VTec posted an 11-fold increase in net profit for the third quarter ended June 30, 2024 (3QFY2024) to RM20.25 million, its best quarterly earnings in six years, boosted by higher contributions from the hard disk drive and electronic manufacturing services segments.