ViTrox (HOLD)
4Q11 Results: Below Expectations
- FY11 reported core net profit of RM22.2m came in below expectations, accounting for 83.1% of our full-year forecast and 83.3% of consensus chiefly due to the disappointing sales performance.
- The decrease in revenue mainly due to reduction in sales from all three product segments, whereby MVS, ABI and ECS recorded a contraction of 58%, 24% and 73% yoy respectively.
- ViTrox attributed this weak sales performance to the slowdown in semiconductor and electronics industry as a result of European financial debt crisis and sluggish US economy.
- Our target price is revised downward to RM0.82 (from RM0.85 previously) based on DCF with a WACC of 13.4% and TG of 0%. This gives ViTrox an implied PER of 6.5x for FY12. We maintain our HOLD call on the equity although there is a slightly higher than 10% potential total return given our cautious view of its profitability in 1H12 and pending further guidance from the analyst briefing.
Source: HLIB Research 29 Feb 2012
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