Hot Stock VS Industry shares hit three-month high

by **Cals** Sat 16 Jul 2016, 17:10

Hot Stock

[size=28]VS Industry shares hit three-month high

By Gho Chee Yuan / theedgemarkets.com | July 15, 2016 : 4:59 PM MYT

KUALA LUMPUR (July 15): Shares in VS Industry Bhd extended gains and hit a three-month high today of RM1.34 in the mid-afternoon trading session.

At 3.53pm, the stock was traded at RM1.32, up 13 sen or 10.92% after 19.77 million shares changed hands, giving it a market value of RM1.42 billion.

It closed at RM1.19 yesterday (July 14) with a trading volume of 2.2 million.

VS Industry is a Johor-based electronics parts and components manufacturer. Its past 65-day average trading volume stood at 3.55 million.

Aside from the additional listing announcement of 5,000 shares under the company's employees' share option scheme (ESOS) announced on July 8 and the 0.8 sen dividend that went ex on July 13, there are no other specific announcements.

Meanwhile, JF Apex Research has initiated coverage on VS Industry last Friday (July 8) with a target price of RM1.50, based on 12.5 times financial year 2017 (FY17) price to earnings ratio (PER) with diluted earnings per share (EPS) forecast of 12 sen.

According to the research house, the PER assigned for valuation of VS Industry is at the sector average PE and +2 standard deviation above mean of historical PE of the group.

"The target PE is warranted in view of its capability of securing sizeable orders from Dyson and its potential strategic acquisition of a healthcare and wellness company under its China operation to further expand its earnings in FY17," said JF Apex head of research Lee Chung Cheng in a report dated July 8.

He estimates VS Industry's FY16, FY17 and FY18 core net earnings to trend positively, up 29.9%, 20.6% and 18.1% respectively on the back of higher revenue achieved.

"Furthermore, the group's profit margin is expected to continue expanding in line with the turnaround in overseas operations," he noted.
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