Hot Stock Notion Vtec leaps 10.17% on potential smartphone contracts

by **Cals** Thu 17 Jul 2014, 04:52

Hot Stock Notion Vtec leaps 10.17% on potential smartphone contracts

Business & Markets 2014

Written by Charlotte Chong of theedgemalaysia.com

Wednesday, 16 July 2014 15:41

KUALA LUMPUR (July 16): Notion Vtec Bhd has jumped 10.17% to 65 sen, on the news that it is close to secure three new contracts from Japanese and South Korean companies, to manufacture smartphone components.

At 3pm, its counter rose 10.17% or 0.6 sen to 65 sen, after it reached an intra-day high of 65.5 sen earlier, with some 2.36 million shares changed hands.

The hard disk drive maker is expected to fetch some RM40 million to RM50 million in annual revenue, should the company secure new contracts on manufacturing component part for smartphones, its executive chairman, Thoo Chow Fah, told The Edge Financial Daily earlier.

Thoo was also quoted as saying that if successful, the deals would start contributing to the group’s bottom line, from financial year ending Sept 30, 2015 (FY15).

Notion Vtec share price has been battered down in the past one year, amid gloomy outlook on the hard disk drive business. The stock has slipped from the peak of 85 sen in August last year, to 55 sen late last month.

The company posted a net loss of RM7.38 million for the second quarter ended March 31 this year — a reversal from a net profit of RM2.39 million. Its revenue has also dropped 13% to RM44.2 million, from RM50.84 million.

In its result announcement May 15, Notion Vtech explained that it was going through a period of consolidation in customers’ order, in line with the soft global markets. “Operationally, we are putting a lot of focus on improving our manufacturing yields, to turn around the company and for the current quarter.”