Wednesday, January 22nd, 2025

VS Industry (VSI MK)

VS Industry (VSI MK)

  • Recommendation: BUY
  • Target Price: RM1.42
  • Current Price: RM1.00
  • Broker: UOB Kay Hian
  • Date of Recommendation: September 10, 2024

Performance Overview: VS Industry has faced a sentimentally driven valuation reset due to three major fear factors: weaker global demand, supply chain disruptions, and tighter monetary policies. Despite these challenges, the company has maintained a strong operational foundation and is expected to deliver a stronger performance in 4QFY24. The recent concerns have created a favorable entry point for investors.

Investment Thesis:

  1. Operational Strength: VS Industry is a well-established player in the electronics manufacturing space with a diversified customer base. Its ability to navigate supply chain issues positions it well for future growth.
  2. Sector Recovery: The electronics manufacturing sector is poised for a recovery as global demand stabilizes, offering upside potential for VS Industry.
  3. Improved Margins Expected: With a sequential recovery expected in 4QFY24, VS Industry is likely to benefit from an improved product mix and cost efficiencies.

Valuation and Risks:

  • The target price of RM1.42 reflects a 42% upside from the current levels. Risks include continued global supply chain disruptions and weaker-than-expected recovery in demand.

    Thank you

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