HLIB Research said the semiconductor equipment/semiconductor production equipment and automatic test equipment subsector continues to face bearish headwinds.
PETALING JAYA: The fall in share price of Vitrox Bhd to current levels at RM3 a share has made it worth considering although the demand for its products are unlikely to recover in the short term due to bearish fundamentals.
Hong Leong Investment Bank (HLIB) Research stated the semiconductor equipment/semiconductor production equipment and automatic test equipment subsector continues to face bearish headwinds which were reflected in Vitrox’s disappointing earnings over the past six quarters consecutively.
The soft market conditions saw its second quarter ended June 30 (3Q24) machine vision system standard segment post a 41% drop in sales year-on-year (y-o-y) but up 84% quarter-on-quarter (q-o-q).
It expects this segment to post revenue of about RM9mil to RM12mil in 3Q24 as there is a potential for short orders to come in by the end of the quarter.
“Inquiries for vision system modules, post-seal inspection and wafer inspection have increased with most turning into orders. Orders are now being placed with shortened lead times ranging two-to-three weeks versus four-to-six weeks previously,” it said.
Vitrox’s machine vision system tray segment saw 2Q24 sales surge by 137% y-o-y and 61% q-o-q, accounting for 32% of overall sales. It was the lead growth driver for the group in the first half of 2024 (1H24), with sales value up some 98% y-o-y.
“Vitrox is expected to deliver 35 to 45 units in 3Q24 with a demand forecast of 70 machines over the next six months. China is expected to contribute more than 80% of 3Q24 sales. Revenue is projected to range RM40mil to RM50mil,” it noted.
VItrox’s other two main segments, automated board inspection and electronic communication system, offered flat sequential growth.
