VITROX – Fundamental Analysis (23 May 2015)

VITROX Analysis:-

Excel –

Notes –

My View:-

  • Valuation:
    • Absolute EY%:
      • Trailing:
        • FY14 (EPS: 0.211) – Fair value 2.38 (Fair Value Uncertainty: EXTREME)
        • R4Q (EPS: 0.233) – Fair value 2.62 (Fair Value Uncertainty: EXTREME)
      • Forward:
        • FY15 (EPS: 0.238) – Fair value 2.68 (Fair Value Uncertainty: VERY HIGH)
        • FY16 (EPS: 0.269) – Fair value 3.02 (Fair Value Uncertainty: VERY HIGH)
      • EPS applied to reach the current stock price (3.63): 0.323
  • As guided, 1Q15 top line grew 45.7% yoy to RM33.3m thanks to ABI sales which surged 96% yoy. However, sales contracted sequentially by 21.7% as both MVS and ABI’s contribution fell by 36% qoq and 15% qoq, respectively. This is in tandem with the seasonally weaker semiconductor equipment spending.
  • I recognize that my valuation is not as compelling as what suggested by Maybank and Hong Leong analysts. To reach target price suggested by them, they assumed that EY% of VITROX can drop to around 5%. Looking at historical EY% band, the average of low EY% is 8.5%, and in 2011, VITROX’s EY% was at 5% level for few months.
    • Of course, we can always argue that "past performance is not an indicator of future results".
    • In my opinion, the recent price performance of VITROX already factored in the future potential earnings.
  • If VITROX encounters correction in future, I may buy VITROX.

Latest Financial – Q1 2015 Financial Report (23 May 2015)

At the time of writing, I  did not own shares of VITROX.


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