KUALA LUMPUR: Public Investment Bank Bhd (PIVB) has maintained a 'neutral' rating on leading integrated electronics manufacturing services (EMS) provider VS Industry Bhd, despite the company securing a new contract.

In a research note, PIVB acknowledged the longer-term investment potential of the company, driven by the strong possibility of acquiring new customers.

However, the firm kept its 'neutral' stance due to limited share price upside.

"Our price-to-earnings (PE)-derived target price is raised to RM1.26 from RM1.04, reflecting the earnings increase and adjusting the multiple to a two-year forward earnings average to account for the group's multi-year growth," it said.

The new contract, valued at RM1.5 billion over the next two financial years, involves manufacturing selected consumer electronics products on a box-build assembly basis, encompassing end-to-end processes such as production, assembly, testing, packaging, labelling and logistics.

Production is scheduled to begin in the first quarter of calendar year 2025.

As of 9.46 am, VS Industry's share price was down 2.0 sen at RM1.22, with 11.56 million shares traded.