VITROX posted a record 2QFY26 core net profit of RM83.9m (+130.8% YoY, +38.1% QoQ), exceeding both our and consensus expectations, lifting 1HFY26 core net profit to RM144.6m (+126.0% YoY), reaching 61.0% of our FY26F forecast of RM237.1m.
We remain bullish on VITROX's earnings trajectory into 2H26, underpinned by sustained AI infrastructure and HBM-related demand, deepening advanced packaging penetration and continued margin expansion as VTSB's MIDA pioneer tax incentive continues to flow through.
We raise our FY26F/FY27F/FY28F core net profit forecasts to RM275.6m/RM362.4m/RM408.2m (from RM237.1m/RM289.4m/RM344.4m) by imputing higher sales assumptions and improving margins.
Maintain BUY with a higher TP of RM11.12 (from RM9.35), based on the 5-year historical mean PE of 54.67x applied to a higher blended FY27F/FY28F EPS of 20.3sen (previously 17.1sen).
Above estimates. The Group's 2QFY26 core net profit of RM83.9m (+130.8% YoY, +38.1% QoQ) was arrived at after excluding a net forex gain (RM2.5m), net fair value losses on financial instruments (RM0.8m) and net inventories written down (RM0.6m). This lifted 1HFY26 core net profit to RM144.7m (+122.1% YoY), driven by robust ABI and MVS billings amid the AI-led semiconductor upcycle, sustained margin expansion and a lower effective tax rate as VTSB's MIDA pioneer incentive continued to flow through.
QoQ. Revenue expanded 40.4% QoQ to a record RM374.9m (1QFY26: RM267.1m), driven by accelerating shipment deliveries and robust customer pull-ins within both the ABI and MVS segments as AI infrastructure and HBM-related demand continued to build. PBT grew 62.1% QoQ to RM99.9m (1QFY26: RM61.7m) on economies of scale and a favourable product mix, while core net profit rose 38.0% QoQ to RM83.9m (1QFY26: RM60.8m).
YoY. Revenue surged 104.8% YoY from RM183.0m, more than doubling as AI infrastructure buildouts, HBM-related testing needs and advanced packaging penetration accelerated across both the ABI and MVS segments. While core net profit surged 130.8% YoY to RM83.9m (2QFY25: RM36.3m) aided by better operating leverage, a favourable product mix and a lower effective tax rate of 15.5% (2QFY25: 26.6%) following the MIDA pioneer incentive granted to VTSB.
YTD. 1HFY26 revenue rose 98.0% YoY to RM642.0m (1HFY25: RM324.2m), and 1HFY26 core net profit came in at RM144.6m (+126.0% YoY) driven by AI-led semiconductor upcycle across both ABI and MVS solutions and VITROX's growing exposure to advanced packaging, HPC/AI server manufacturing and data centre infrastructure buildouts.
Outlook. We expect the AI-driven demand upcycle, an expanding NPI pipeline and continued relief under VTSB's MIDA pioneer incentive (effective through September 2030) to support sequential earnings growth through 2HFY26, though management remains mindful of forex volatility and geopolitical risks to the semiconductor supply chain. Furthermore, Management expects a favourable operating environment into 2HFY26, backed by sustained AI and data centre capex spending.
Earnings Revision. Following the record 2QFY26 beat, we raise our FY26F/FY27F/FY28F core net profit forecasts by 16.2%/19.5%/18.5% to RM275.6m/RM362.4m/RM408.2m (from RM237.1m/RM289.4m/RM344.4m), imputing higher ABI and MVS billing assumptions, sustained margin expansion and VTSB's lower effective tax rate.
Valuation & Recommendation. We maintain BUY rating with a higher TP of RM11.12 (from RM9.35), based on the 5-year historical mean PE of 54.67x applied to a higher blended FY27F/FY28F EPS of 20.3sen (previously 17.1sen), backed by (i) Accelerating AI-driven demand for advanced packaging and high-precision inspection, and (ii) sustained double-digit earnings growth over our forecast horizon.
Risks. Appreciation of RM against USD, US semiconductor tariffs and geopolitical uncertainties, slowdown in semiconductor and DC upcycle, potential escalation of trade tensions impacting global semiconductor supply chains.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.075074 | 4.107717 |
| EUR | 4.687639 | 4.692403 |
| CNY | 0.605303 | 0.605923 |
| HKD | 0.519707 | 0.523362 |
| SGD | 3.161063 | 3.183454 |