KUALA LUMPUR: Vitrox Corp Bhd
could break its previous revenue records yet again and hit up to RM80mil in Q2 FY17 on strong order backlog, said Maybank Investment Bank Research.
The research house said on Monday that the strong order backlog was mainly from its automated board inspection (ABI).
“The strong order backlog also means that the revenue momentum could sustain into Q3 FY17, at least.
“While floor space and lead time for the crucial parts are potential bottlenecks, we believe that ViTrox’ story does not end in 2017 as it continues to venture further into inspection automation of new products,” it said in a note.
Maybank IB Research has a Buy call on the counter with a 12-month target price of RM7.20.
The automated vision inspection equipment maker saw its Q1 FY17 service income grow 35% on-year to RM7.2mil, representing 10% of group revenue.
It added that ViTrox’ bundling of its V-One services (live syncing of equipment for analytics) will likely reap subscription fees (currently free) from its customers once adoption reaches a meaningful volume.
This, it said, set the stage for higher recurring earnings to smoothen out on-quarter volatility in equipment sales.
With core expertise in X-ray inspection, the research house said ViTrox was arguably one of a handful of equipment players with leading technology beyond its time which will reap the benefits of its R&D going forward.
“Despite concerns of on-going competition globally, the overall sector is still going through a structural change whereby inspection automation will replace human labour, no longer effective in carrying out inspection of tiny components.
“ViTrox’s visibility should extend beyond the near-term order backlogs,” it added.
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