NOBODY knows for sure if the tanking of VS Industry Bhd’s share price this morning (March 3) has anything to do with migrant worker rights specialist Andy Hall withdrawing his voluntary engagement with Johor-based electronics manufacturing services (EMS) outfit after a fruitless thee-month collaboration.

The labour activist attributed his withdrawal to VS Industry’s failure to honour its previous commitments made publicly to Bursa Malaysia and “particularly by having unilaterally selected an auditor to conduct an independent third-party social compliance audit (concerning its irregular workers situation) without consultation with me”.

Share price of the company started to nosedive from its yesterday’s (March 2) closing price of RM1.10 around 10.45am before hitting an intra-day low of 92.5 sen which was also its 52-week low over the next half an hour.

However, VS Industry was able to pare losses by climbing back to close down 10 sen or 9.09% at RM1 at the close of today’s mid-day trading by being the second most actively traded stock with 74.1 million shares traded, thus valuing the company at RM3.83 bil.

“Limited information on the audit methodology has been shared. VS has stated the full audit findings will not be shared with me,” Hall pointed out in a WhatsApp statement.

“In addition, VS stated that the audit will take three to four months and an unnamed independent labour rights expert and lawyer will supplement the audit methodology by PwC Consulting Associates (M) Sdn Bhd.”

Elsewhere, fellow EMS peer SKP Resources Bhd, too, was somehow rocked by the fate of VS Industry. SKP had in December last year joined VS Industry to engage Hall on ways to improve the welfare of their foreign workforce.

The counter shed 4 sen or 2.90% at the close of mid-day trading to RM1.34 (after touching an intra-day low of RM1.32) with 5.52 million shares traded which gave the company a market capitalisation of RM2.09 bil.

Meanwhile, ATA IMS Bhd closed the mid-day trading unchanged at 39 sen with 5.05 million shares traded, thus valuing the company at RM470 mil.

In its recent assessment of ATA IMS, CGS-CIMB Research has reiterated its “reduce” stance with an unchanged target price of 29 sen “as we continue to forecast losses for ATA going into FY3/2023-FY3/2024F.

“We will turn more bullish on earnings prospects once we see (i) the entry of new customer; and (ii) clearer signs of its cost-cutting measures bearing fruit going into FY3/2023F,” opined analyst Nagulan Ravi in a results review.

For its 9M FY3/2022 period, ATA IMS’ net profit has shrunk almost 86% to RM17.74 mil (9M FY3/2021: RM123.36 mil) while its revenue has dwindled 33% t;o RM2.17 bil (9M FY3/2021: RM3.25 bil).

For the record, UK electrical appliance giant Dyson which currently contributes 80% of ATA IMS’ revenue will cease to be the latter’s main customer on June 1 following a termination notice on Nov 24 last year. – March 3, 2022

https://focusmalaysia.my/has-andy-hall-anything-to-do-with-vs-industrys-share-price-tanking/