In a note today, it said until production volume and factory utilisation picks up, the electronics manufacturing services (EMS) provider’s margin is expected to remain under pressure due to “inefficient operating leverage”.

“We maintained a ‘hold’ call on lack of re-rating catalysts with a target price (TP) of 80 sen per share,” said Maybank IB, adding its preferred exposure in the EMS sector is Aurelius Technologies.

In a filing with Bursa Malaysia yesterday, VS Industry’s net profit plunged 47.8% to RM26.77 million in the third quarter ended April 30, 2023 (Q3 FY2023) from RM51.29 million in the previous quarter due to higher electricity, labour and financing costs, as well as net foreign exchange loss.

However, revenue rose RM69.2 million or 7.5% to RM996.8 million from RM927.59 million previously.

The company also announced a third interim dividend of 0.4 sen per share for the financial year ending July 31, 2023, and which will be paid on July 28, 2023, to shareholders whose names appear on the company’s record of depositors on July 12, 2023.

The total dividend per share for the current financial year is 1.2 sen (FY2022: 1.2 sen).

Meanwhile, Hong Leong Investment Bank also maintained a “hold” call on VS Industry with an unchanged TP of 88 sen.

“We reiterate our call in view of the volatile market climate and cautious demand.

“We remain wary as demands from major brand owners could still be subdued given the recessionary fears and subdued consumer sentiment,” it added.

At mid-day break, VS Industry’s share price was flat at 84.5 sen with 9.84 million shares traded, giving it a market capitalisation of RM3.26 billion.