ViTrox registered 3QFY25 core profit of RM33.8m (-7% QoQ, -5% YoY), bringing its 9MFY25’s sum to RM97.8m (+20% YoY) – in line with both our (78%) and street (77%) forecasts.
The group achieved record high quarterly revenue of RM228.6m (+25% QoQ) due to strong demand recovery as reflected by growing sales funnel across all business segments. Nonetheless, core earnings shrunk 7% QoQ owing to higher effective tax rate of 32% (vs 2QFY25: 27%) following the expiry of pioneer status incentive in 2QFY25.
We maintain BUY rating with an unchanged target price of RM5.00, derived from a 46x PE multiple applied to mid-FY26F EPS of 10.9 sen.
Results inline. ViTrox recorded 3QFY25 core earnings of RM33.8m (-7% QoQ, -5% YoY), bringing its 9MFY25’s sum to RM97.8m (+20% YoY). The results matched both our (78%) and street (77%) forecasts. 9MFY25 results were arrived after adjusting for net EIs of RM11.4m, mainly comprising net forex loss (+RM12m), net inventories written down (+RM1.6m), fair value gain on financial instruments (-RM2.7m), among others.
QoQ. The group achieved record high quarterly revenue of RM228.6m (+25%), led by improved showing in both ABI and MVS at RM127m (+14%) and RM97m (+43%), respectively. As a result, PBT grew at a faster clip (+33%) as PBT margin expanded 140bps thanks to better operating leverage. Nonetheless, core earnings shrunk 7% QoQ owing to higher effective tax rate (ETR) of 32% (vs 2QFY25: 27%) following the expiry of pioneer status incentive in 2QFY25 and increased non-deductible expenses.
YoY. Despite revenue growth of 56% driven by robust demand across both ABI and MVS divisions, core net profit was down slightly (-5%) as tax expenses surged 4.5-fold, no thanks to the expiry of pioneer status incentive in 2QFY25 as mentioned above.
YTD. Top line marked a strong recovery (+37%), driven by broad-based strength in ABI and MVS segments. Coupled with a PBT margin expansion of 230bps, PBT jumped 54%. However, the higher ETR of 26% (vs 9MFY24: 10.6%) capped its bottom-line growth at 20%.
Dividend. None.
Outlook. The group’s book to bill ratio improved to 1.2x at end-3QFY25 (end-2QFY25: 1.1x), signalling sustained demand momentum in the coming quarter. We believe ViTrox is on the cusp of strong earnings upcycle over the next 1–2 years, driven by its expanding NPI pipeline that should boost sales volume and ASP across the ABI and MVS divisions. Its latest AI-enabled inspection platforms, including the AXI QX1 and WiX AI wafer AOI, should cement its technological edge and position it to ride on the semiconductor and EMS capex upcycle, especially in advanced packaging and AI server manufacturing. As for the tax rate, we expect the pioneer status to be successfully renewed by end-FY25, which should lower the group’s ETR in FY26 as it gradually phases out its legacy models.
Forecast. No change to forecasts pending further clarify from the analyst briefing later today.
Valuation & Recommendation. We maintain BUY with an unchanged TP of RM5.00, derived from 46x PE multiple applied to mid-FY26F EPS of 10.9 sen. Our target multiple is +1SD above ViTrox’s 5-year historical average of 40x, reflecting 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.
Risks. Appreciation of RM against USD, risk of pioneer status non-renewal, US semiconductor tariffs and geopolitical uncertainties.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.095157 | 4.126734 |
| EUR | 4.808018 | 4.811741 |
| CNY | 0.582345 | 0.582796 |
| HKD | 0.526309 | 0.529879 |
| SGD | 3.164796 | 3.186440 |