ViTrox Corp (HOLD)
More Turbulence Ahead
- ViTrox guided that 1Q12 will be worse than 4Q11 as sales volume continue to decline chiefly attributable to global economic uncertainty hindering customers from investment on capital equipment.
- However, ViTrox believe that the decline in revenue has bottomed out in Jan 12 and started to pick up in Feb and Mar in the form of spot orders rather than budgeted-recurring orders.
- However, ViTrox highlighted that ABI products are currently under intense price pressure from Taiwan-based TRI and new Chinese peers.
- Comments: ViTrox maybe proposing a final dividend of 1 sen for FY11 in order to match 20% payout ratio as committed.
- Although not preferred by ViTrox, we think that leasing model maybe a more viable solution for customers during this difficult period while it also commands higher margins.
- SEMI estimated that semiconductor equipment spending to remain flat in 2012 but would enjoy an optimistic growth of 17% in 2013.
- Our target price is revised downward to RM0.71 (from RM0.82 previously) based on DCF with a WACC of 13.4% and TG of 0%.
Source: HLIB Research 19 March 2012
No comments:
Post a Comment