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HLIB Research upgrades ViTrox to Buy, raises target price to RM3.17

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HLIB Research upgrades ViTrox to Buy, raises target price to RM3.17 Empty HLIB Research upgrades ViTrox to Buy, raises target price to RM3.17

Post by Cals Fri 03 Oct 2014, 18:01

HLIB Research upgrades ViTrox to Buy, raises target price to RM3.17
Business & Markets 2014
Written by theedgemalaysia.com   
Friday, 03 October 2014 08:54

KUALA LUMPUR (Oct 3): Hong Leong IB Research (HLIB) has upgraded Vitrox Bhd to a Buy (from Hold) with a fair value of RM3.17 and said the company stood to benefit from China’s entry into the semiconductor era.
In a note Friday, HLIB said China was entering into the semiconductor era to fuel its economy growth.
It said a task force was convened to develop a policy framework that is targeting a CAGR for the industry of 20% between 2015 and 2020, with potential financial support from the government of up to Rmb1tr (USD170bn) over the next 5 to 10 years.
“We think this will be a boon to ViTrox as a semiconductor equipment supplier leading to potential multi-year high demand of its products.
“With its cutting edge precision technology, we are confident that ViTrox has the upper hand over competitions and can win more market share, especially when 20nm and below chips are becoming an industry norm.
HLIB said the company’s presence was well-established and has been increasing both sales channel partners and customers in China.
“Upgrade from Hold to Buy after raising our fair value to RM3.17, pegged to 1SD above 5-year historical average P/E multiple of 16.2x,” it said.
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