(VSI MK/BUY/RM2.53/Target: RM3.10)

VSI’s 4QFY17 results (+4.7% qoq, +110.8% yoy) were above expectations. The next earnings surge will be in 2HFY18 on the back of full ramp-up of contracts for its key customers. Potential catalysts in the longer term include: a) contract wins from existing and new customers, and b) new projects in China. VSI is our top pick for the manufacturing sector. Maintain BUY and target price of RM3.10, based on 14x fullydiluted FY19F EPS.

Source: UOB Kay Hian Research - 28 Sept 2017