ViTrox (HOLD)

• FY11 reported core net profit of RM22.2m came in below expectations,accounting for 83.1% of our full-year forecast and 83.3% of consensus chieflydue to the disappointing sales performance.
• The decrease in revenue mainly due to reduction in sales from all threeproduct segments, whereby MVS, ABI and ECS recorded a contraction of 58%, 24%and 73% yoy respectively.
• ViTrox attributed this weak sales performance to the slowdown insemiconductor and electronics industry as a result of European financial debtcrisis and sluggish USeconomy.
• Our target price is revised downward to RM0.82 (from RM0.85 previously)based on DCF with a WACC of 13.4% and TG of 0%. This gives ViTrox an impliedPER of 6.5x for FY12. We maintain our HOLD call on the equity although there isa slightly higher than 10% potential total return given our cautious view ofits profitability in 1H12 and pending further guidance from the analystbriefing.