Excel – http://1drv.ms/1niIRA5
– Fair value:
– 5Y DCF: 1.59 – 1.80 (MOS: -25% -> -10%)
– Absolute EY%: Buy below 1.18, sell above 2.24
– VITROX is nearly or fully valued, and its MOS is lower than my MOS (19%)
– I believe that FY14 will be a growth year for VITROX because of the recovery of global semiconductor industry and improving US, Japan and European markets.
– I still sees a lot of growth in Vitrox – the catalysts from Agilent’s exit in 2016 and competitive products should help it compete to get individual orders. But with the trend moving towards a single supplier, which provides the entire array of testing equipment that seamlessly talk to each other, Vitrox is currently being left behind. A substantial change in its internal R&D activity to innovate or potential acquisitions with talents or acquisitions with new product offerings to complement its existing portfolio, are the only ways for Vitrox to grow in the longer term.
– I will hold VITROX. I may sell it if it shows bearish reversal signal.
Latest Financial – Q1 2014 Financial Report (22 May 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1630053
At the time of writing, I owned shares of VITROX.