PETALING JAYA: ViTrox Corp Bhd’s earnings outlook remains on an upward trajectory, with demand from artificial intelligence (AI) and data-centre investments supporting a more sustainable upcycle, says BIMB Securities Research.
The research house said the current upcycle appeared more sustainable than the Covid-era boom.
This is as demand is now being driven primarily by enterprise and hyperscaler investments in AI and data-centre infrastructure rather than consumer electronics, with August 2026 electrical and electronics (E&E) export growth providing further confirmation of industry strength.
BIMB Research said ViTrox has guided revenue of between RM360mil and RM402mil for its third quarter ending Sept 30 (3Q26), implying another quarter of growth despite a higher base.
“Backed by ongoing AI and data-centre investments, a healthy book-to-bill ratio of 1.5 times, improving margin and support from the pioneer incentive, we expect further earnings growth on both a quarter-on-quarter and year-on-year basis,” it noted.
The research firm said Malaysia’s E&E exports rose 66.5% year-on-year to RM92.5bil in August 2026, reflecting robust demand from AI, cloud computing and data-centre investments.
“The strength across the E&E segment provides a favourable backdrop for the semiconductor value chain, including inspection and machine vision solutions where ViTrox operates,” it added.
Consequently, the research house raised its earnings forecasts for the financial year ending Dec 31, 2026 (FY26) to FY28 by 10.3%, 9.5% and 9%, respectively, reflecting higher machine deliveries and improved margin assumptions.
It maintained its “hold” call on ViTrox, but raised its target price to RM10.30 from RM8.48 a share.
The target price is based on a higher price-to-earnings ratio assumption of 50 times, from 45 times previously, applied to FY27 earnings per share of 20.6 sen.
BIMB Research pointed out that ViTrox’s share price has risen from its 52-week low of RM3.70 to a 52-week high of RM10.
The research house noted that the rerating had been supported by a meaningful earnings upgrade cycle rather than multiple expansion alone, suggesting that improving fundamentals had been the primary driver of the share-price performance.
“Given the healthy order backlog, favourable demand environment and sustainable capital expenditure deployment across the AI ecosystem, we believe the current earnings cycle still has room to run,” it said.
However, it cautioned that ViTrox’s share price started consolidating during the Covid-era boom even as earnings continued to rise, with profit after tax and minority interest reaching a record RM200.8mil in FY22.
“Furthermore, this highlights the risk of relying solely on near-term earnings momentum, as equity markets typically discount future growth well in advance,” it said.