VS Industry – Stronger sales in the 2H

VS Industry – Stronger sales in the 2H                                                       Outperform (Upgraded)

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-          VSI expects stronger orders from Dyson in 2H on the back 3 new model launches, potentially increasing by 15-20% yoy in the 2H. Dyson accounts for around 70% of revenue.

-          We have raised our target PER to 8x from 6x to reflect the stronger earnings growth expected and an improved outlook ahead. Coupled with our earnings adjustment, our fair value estimate is raised to RM2.10/share. We upgrade our recommendation to Outperform (from underperform).

Source: RHB Reserach - 4 April 2012