will there be a workshop in KL, in future?

Observers envisage its core net earnings to grow by 29.9% to RM135.7 million for FY16 forecast (FY16F), and by 20.6% to RM163.7 million for FY17F, with key earnings contributions from its three major clients, namely Dyson, Keurig and Zodiac.

VS Industry commands a sturdy balance sheet with a currently (July 2016) low net gearing of 0.2 times, which allows it to have ample flexibility to gear up for future capacity expansion and mergers and acquistions.

It could clinch more orders in respect of box build full assembly for the new vacuum cleaner model from Dyson. The first purchase order could come in a few months’ time from July 2016. It could bag as much as RM300 million new orders per annum from Dyson from FY17F, over a period of three to five years. This would lift earnings by 12.6% for FY17F and 10.8% for FY18F. This is on top of existing Dyson models with a job scope worth an estimated RM650 million in FY17F.

VS Industry may consider taking up a stake in a healthcare and wellness company to reap synergistic benefits. This could render sub/full assembly works worth RM180 million yearly under its China operation, in addition to profits from the ownership stake in the immediate term. Should the acquisition materialise, it could contribute RM13 million in yearly net profit to the group from FY17F onwards.

For the acquisition of a 12.1% stake in Seeing Machines Ltd, observers expect VS Industry to benefit from research and development collaboration and manufacturing opportunities of the company in the longer run.