The research house, which has a "buy" call on the counter, said it is expecting higher orders from VS Industry's existing customers and its new customer.
"We also understand that VSI is in talks with a potential customer and this could lead to establishment of a new factory," it said.
"We raise our FY21-22E earnings by 8-10% and nudge up our TP by 20sen to MYR2.45, pegged to an unchanged 19x CY21E PER at +1SD," it said.
The research house raised its target price to RM2.45 from RM2.25 previously, which represents 15% upside from Monday's last traded price of RM2.16
For FY20, VS Industry's core net profit of RM130.4mil beat expectations at 152% and 140% of Maybank IB's and consensus estimates.
The most recent quarterly core earnings was RM69.9mil, which exceeded estimates as Maybank IB had assumed a more bearish fourth quarter earnings growth.
4QFY20's core bottomline growth was mainly pulled bback by lower order from the company's key UK-based customer and pretax losses from its Indonesia and China segments due to underutilisation of production capacities.
Earnings however were partly cushioned by higher sales volume fro its coffeemaker customer and lower opex in China post major restructuring exercises in FY19.
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