For QE30/9/2019, Vitrox's net profit dropped by 43% q-o-q or 51% y-o-y to RM14 million while revenue dropped by 25% q-o-q or 35% y-o-y to RM67 million. Revenue dropped y-o-y mainly because of decline in customer demand by 39% and 24% from Automated Board Inspection (ABI) and Machine Vision System (MVS) respectively. The profit before tax declined by 52% due to decline in sales volume coupled with product mix apart from continuous investment in R&D activities.
Table: Vitrox's last 8 quarterly results
Graph: Vitrox's last 42 quarterly results
Valuation
Vitrox (closed at RM8.07 yesterday) is now trading at a PE of 42 times (based on last 4 quarters' EPS of 19.40 sen). At this PER, Vitrox is deemed fully valued.
Technical Outlook
Vitrox is still in an uptrend line with support at RM7.00-7.10. Its immediate support is at the horizontal line at RM7.30.
Chart: Vitrox's weekly chart as at Oct 24, 2019 (Source: Malaysiastock.biz)
Based on weaker financial performance and demanding valuation, I think it is advisable to take profit on Vitrox after a strong run-up since August 2017 (here).
Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.
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