ViTrox Corporation Berhad - Positioning for the next wave of upcycle
Mon, 06-Oct-2025 07:59 am
by Brian Chin Haoyan • Apex Research

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VITROX (0097)

Target Price (RM)

5.00

Recommendation

Buy

Suite of new models to ride on demand upcycle. ViTrox has unveiled a pipeline of new products across both ABI and MVS segments in 2025 to strengthen its competitiveness and penetrate into high-growth areas such as advanced packaging and AI servers, which we believe will propel the group’s financial performance to new heights. Among ViTrox’s New Product Introductions (NPI) are (i) WiX Ai: Smart Wafer AOI Machine that is designed for automated wafer handling and comprehensive defect control across the front, inner, and back surfaces of wafers in a single platform, (ii) new AXI models built on QX1 platform launched in 2025 targeting AI server programs and (iii) enhanced AOI V510i series with AI powered inspection and AI Smart Programming.

 

Acceleration of volume and ASP growth. ABI segmental contribution is set to record sequential expansion with RM120m in 3Q25 (c.+8% QoQ), supported by a strong equipment backlog of RM55m and sales funnel of over RM70m as of end-Jul. We expect momentum to accelerate in 4Q25 and into FY26, underpinned by the scaling of AXI QX1 system orders following successful evaluations by key accounts. The QX1 series commands a 30-40% ASP upside versus its previous AXI models. Similarly, MVS-T should register improvements in the coming quarters due to robust sales funnel of over 70 machines in 2H25. MVS-T is poised for a stronger 3Q25 with an estimated 35-45 machines scheduled for delivery (vs 33 units in 2Q25), marking the highest quarterly volume since 2022. Despite increasing competition in China, its MVS-T products ASP remained on an uptrend in China, reflecting its technological edge in the fiercely competitive market. The introduction of TH3000i Max later this year should also aid in sustaining ASP growth. 

 

Geopolitical friction a net positive. ViTrox is well-positioned to gain greater share from the US and Taiwan markets as both countries seek to reduce its reliance on Chinese supply chains. We believe Taiwan would be a key growth area going forward given its deep exposure to advanced packaging and AI server manufacturing, areas where ViTrox’s latest-generation products are gaining traction. Meanwhile, US reshoring policies are expected to accelerate semiconductor and manufacturing investments in the US, which should drive incremental demand for back-end equipment. Taiwan’s contribution (currently c.13% of revenue) is expected to trend higher going forward, while the US (c.10%) could emerge as another growth driver over the longer term. 

 

Valuation & Recommendation. We initiate coverage on ViTrox with a BUY rating and a target price of RM5.00, derived from a 46x PE multiple applied to mid-FY26F EPS of 10.9 sen. Our target multiple, which represents +1SD above ViTrox’s 5-year historical average PE of 40x, reflects our view that the stock is poised for a rerating on the back of: (i) rising exposure to high-growth segments such as HPC/AI server manufacturing and advanced semiconductor packaging, and (ii) strong double-digit earnings growth over our forecast horizon, supported by the semiconductor capex upcycle to meet AI-driven demand. We also believe ViTrox warrants a premium to Bursa-listed technology equipment and support players given its (i) consistent innovation track record to stay ahead in competition, (ii) superior corporate governance and management execution, and (iii) position as one of Malaysia’s largest and most established listed technology companies.

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