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:
- 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.
- Sector Recovery: The electronics manufacturing sector is poised for a recovery as global demand stabilizes, offering upside potential for VS Industry.
- 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
