ViTrox poised for sustained AI-led growth

PETALING JAYA: ViTrox Corp Bhd is expected to remain supported by sustained demand for artificial intelligence (AI) infrastructure, continued data centre investments and an expanding pipeline of new products.

Apex Research said the group’s second quarter of financial year 2026 (2Q26) core net profit of RM83.9mil was arrived at after excluding a net foreign-exchange (forex) gain (RM2.5mil), net fair value losses on financial instruments (RM0.8mil) and net inventories written down (RM0.6mil).

“This lifted the first half of financial year 2026 (2H26) core net profit to RM144.7mil, driven by robust automated board inspection (ABI) and machine vision system (MVS) billings amid the AI-led semiconductor upcycle, sustained margin expansion and a lower effective tax rate as ViTrox’s Malaysian Investment Development Authority (Mida) pioneer incentive continued to flow through,” the research house said in a report recently.

Apex Research said it expects the AI-driven demand upcycle, an expanding new product introduction pipeline and continued relief under ViTrox’s Mida pioneer incentive (effective through September 2030) to support sequential earnings growth through 2H26, though management remains mindful of forex volatility and geopolitical risks to the semiconductor supply chain.

“Management expects a favourable operating environment into 2H26, backed by sustained AI and data centre capital expenditure (capex) spending.”

Apex Research said following the record 2Q26 beat, it raised its financial year 2026 (FY26), FY27 and FY28 core net profit forecasts by 16.2%, 19.5% and 18.5% to RM275.6mil, RM362.4mil and RM408.2mil (from RM237.1mil, RM289.4mil and RM344.4mil), imputing higher ABI and MVS billing assumptions, sustained margin expansion and ViTrox’s lower effective tax rate.

It has a “buy” call on ViTrox with a higher target price of RM11.12 (from RM9.35).

Hong Leong Investment Bank (HLIB) Research said it expects the group’s momentum to remain intact through 2H26, supported by a broadening capex cycle across global EMS customers, particularly the Western players.

“With the book-to-bill ratio exiting 2Q26 at 1.5 times despite a 40% quarter-on-quarter (q-o-q) increase in revenue, demand continues to outpace supply, reinforcing our view that capacity remains the key gating factor.”

HLIB Research said even after raising its FY26 to FY27 forecasts, it sees room for further upside should ViTrox continue to expand capacity ahead of schedule and take market share in this tight supply environment – as it did this quarter, growing 40% q-o-q versus its Taiwanese peer, Test Research Inc at 21%.

“We expect the effective tax rate to trend lower in the coming quarters as the sales mix shifts further towards newer equipment that is covered under the pioneer status,” the research house said.

HLIB Research raised its FY26 to FY28 earnings per share forecasts by 16% to 27% respectively, mainly to reflect higher shipment and ASP assumptions for the MVS-T and ABI segments.

It upgraded its call for ViTrox to a “buy” from “hold” with a higher target price of RM9.85 (from RM8.05), pegged to an unchanged 45 times 2027 price-to-earnings ratio.

Meanwhile, CIMB Research said it revised up its FY26 to FY28 earnings per share forecasts by 28% to 37%, underpinned by stronger-than-expected shipment volumes from the MVS and ABI segments, alongside margin expansion from a richer product mix and a lower effective tax rate.

“We remain positive on ViTrox’s growth outlook and ABI segments, alongside margin expansion with AI infrastructure investments expected to sustain demand through 2H26.

“The increasing complexity of AI chips, growing high-bandwidth memory adoption, and rising AI server content are accelerating demand for advanced vision and X-ray inspection systems.”

CIMB Research said ViTrox continues to build capacity for future growth via new campuses, a planned 500,000 sq ft manufacturing facility, workforce expansion, and its “Made in China for China” strategy.

“Alongside its ongoing new product rollout, these initiatives should strengthen the group’s competitive position and drive earnings growth through FY27 to FY28.”

CIMB Research has a “buy” call on ViTrox with a target price of RM10.