The key FBM KLCI fell briefly below the crucial 1,600 level in afternoon trade on Monday on mounting selling pressure in line with the key Asian markets.
KUALA LUMPUR: VS Industry Bhd
hit limit-down at the start of Monday trading as its recent quarterly results missed estimates and the company warned of weaker earnings moving forward.
At 9.04am, the counter was down 35 sen or 30% to 82 sen on the back of 9.63 million shares traded.
Short selling was also suspended for the rest of the day after it breached the 15% or 15 sen limit.
According to PublicInvest Research, The group started off the new financial year on a lacklustre note with 1QFY19 net profit of RM39.8m, which was 7.1% lower year-on-year.
"Difficulties in China weighed as under-utilisation at its plants and a loss from disposal of a subsidiary contributed to a pretax loss of RM20.4m (before minority interests).
"Of greater concern is the company’s guidance of demand in its Malaysian operations tapering off," it said.
The research house cut its target price on the counter to 97 sen from RM1.64 previously and lowered its call to neutral.
Meanwhile, AmInvestment Research maintained its hold recommendation on the stock with a fair value of RM1.31 a share, down from RM1.78 previously.
"We have lowered FY19F–FY21F forecasts by 15-20% in anticipation of lower sales orders for one of its key customers in 2HFY19, following a conference call with management," it said.
"Moving forward, prospects in 2HFY19 are expected to dampen due to expectations of declining order flow from a key customer for its Malaysian segment.
"On a more positive note, VSI is currently in serious talks with more than five prospective MNC customers to secure new orders that would fill up the excess capacity."
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