VS Industry Bhd(April 10,RM1.92)Maintain buy with an increased fair value (FV) of RM2.30: We value VS Industry at a higher FV of RM2.30 per share after raising our earnings estimates by 6% to 11% for financial year 2017 (FY17) to FY19. We have raised our FY17 earnings forecast (FY17F) to RM169.8 million (from RM153.4 million previously). We recently made a trip to VS Industry’s plant in Senai, Johor and are increasingly convinced about VS Industry’s earnings momentum going forward. We believe that the premium is justified due to VS Indusry’s stronger earnings visibility underpinned by increasing order flow from Customer X. VS Industry is currently the sole vertically integrated (VI) supplier for Customer X in Malaysia. Based on current monthly production levels, VS Industry looks set to achieve our box-build forecasted revenue of RM452 million in FY17 for Customer X.

Source: The Edge Markets April 11, 2017 02:37 UTC