PETALING JAYA: Foreign-exchange volatility, higher reciprocal tariffs from the United States, and component shortages could weigh on Vitrox Corp Bhd
’s near-term margins, says Hong Leong Investment Bank Research (HLIB Research).
This is despite ViTrox’s core net profit for the second quarter of this year (2Q25) coming in within HLIB Research’s expectations at RM37mil.
Earning’s for the first half of this year (1H25) accounted for 54% HLIB Research’s full-year forecast and 50% of consensus full-year estimates.
Vitrox designs and manufactures automated vision inspection equipment and system-on-chip embedded electronics devices for the semiconductor and electronics packaging industries
“We downgrade ViTrox to ‘sell’ from ‘hold with an unchanged target price of RM2.65 based on a price-earnings (PE) multiple of 34 times for 2026 earnings per share,” HLIB Research said in a report.
The research house said since its 1Q25 results, ViTrox’s share price has surged by 40% amid a strong rebound in sentiment for the technology sector, and the company’s current valuation at 48.5 times PE for 2026 “appears stretched”, considering “lingering demand risks from US tariff uncertainties”.
All of ViTrox’s segments posted growth, led by automated board inspection (up by 16%) and machine vision system tray (up by 59%).
The research house also noted that ViTrox’s book-to-bill ratio normalised to 1.1 times at the end of 2Q25, down from 1.3 times in 1Q25, as the “boost from order frontloading tapered off”.
UOB Kay Hian Research (UOBKH Research) also maintained its “sell” call on ViTrox with a target price of RM2.60.
While the research house said it liked ViTrox for its structurally well-diversified revenue streams which would position it well for a rebound in 2026, it believed the company’s valuations appear stretched.
UOBKH Research said ViTrox’s end-customers in the automated board inspection and machine vision system segments may be vulnerable due to tariff and policy uncertainties.
Maybank Investment Bank Research maintained its forecasts and “hold” call on ViTrox, “pending further clarity post-results briefing”.
However, the research house revised its 12-month target price upwards to RM3.89 from RM2.80, pegged to a 53 times FY26 price-earnings multiple from 38 times previously.
This is due to “improved overall demand for their products amid the global manufacturing shifts”.
CIMB Research also maintained its “hold” call on ViTrox with a target price of RM3.80 from RM3.20 previously, based on a higher 40.8 times 2026 forecast price-earnings multiple.
It expects ViTrox to register stronger momentum in 2H25, underpinned by demand growth in infrastructure artificial intelligence, 5G devices, and advanced medical technologies.
Affin Hwang Investment Bank was the only research house that maintained a “buy” call for ViTrox with a higher target price of RM5.30 (from RM3.85).
“We believe that investors will continue to crowd around the proxies to AI plays which would justify its premium valuations over the near term,” it said.
