"We reduce our FY20F–FY22F forecasts downwards slightly by 1–2% after tweaking forecasts for its Malaysian segment," it said.
In a note, the research house said orders for one of VSI's key customer's model have tapared as it has reached the end of the product lifecycle.
However, the group has secured PCBA orders from a new customer which is expected to contribute RM200mil in revenue in FY20F.
"This partially mitigates the anticipated decline in overall PCBA orders as some of VSI’s customers head towards self-sufficiency by producing PCBA in-house," said AmInvestment.
The group has also secured another full-assembly customer, which is expected to contribute RM100mil revenue per annum.
In its Indonesian operations, VSI will focus on securing orders and improving utilisation rates where the segment is expected to sustain its performance.
However, the challenging operating environment in China is expected to continue with weak sentiment, resulting in continued underutilisation of its facilities.
For Fy19, VSI recorded better-than-expected FY19 results due to a favourable product mix for a key customer in the Malaysian segment.
"Post-1QFY19, VSI had issued a profit warning as there was an anticipated dampening of orders for one of its key customers in its Malaysian segment following a change in its number of assembly lines.
"However, some models were replaced by others that performed better in the market which resulted in larger economies of scale and improved production efficiencies for VSI," it said.
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