The hard disk drive component maker fell as much as 28.8% or 39.5 sen to 97.5 sen in morning trading and is on course for its fifth consecutive day of decline.
It pared its losses by the midday break, and was down 17.5% or 24 sen at RM1.13, valuing the group at RM593 million. It was the most traded stock on Bursa Malaysia at the break, with 86.1 million shares changing hands.
The counter has been a poster boy for the technology sector this year, and despite today’s sharp fall, it is still up 297% year-to-date.
The stock was just 32 sen on Jan 2, and soared to a year-high of RM2.38 on June 21, a 644% surge from the price at the beginning of the year. However, it has fallen 44% over the past month.
The recent drop in its share price could have been due to investors’ adverse reaction to an underwhelming earnings guidance by the company.
In a recent investors’ briefing, the group indicated negative foreign exchange hedges could drag down its earnings in the quarter ending September 2024 (Q4 FY2024).
This comes on the back of Notion VTec posting an 11-fold surge in net profit for the third quarter ended June 30 (Q3 FY2024) to RM20.25 million from RM1.82 million a year earlier.
This was its best quarterly net profit since Q4 FY2018, when it recorded earnings of RM36.54 million.
Quarterly revenue jumped 63% to RM135.5 million from RM83.2 million a year earlier, boosted by higher contributions from its hard disk drive and electronic manufacturing services (EMS) segments.
The company was founded in 1995 by its executive chairman Thoo Chow Fah, managing director William Choo, and executive director Lee Tian Yoke. It has plants in Selangor, Johor and Thailand with a staff force of about 2,500.
Bad day for Genetec
Notion VTec was not the only technology stock seeing a plunge in its share price today. Genetec Technology Bhd tumbled as much as 26% or 37 sen to RM1.05, its lowest in more than three years.
Like the former, the sharp drop triggered a suspension in the stock’s intraday short selling for the day. A contract manufacturer for automated industrial equipment, Genetec is on course for its ninth trading session of decline.
At the time of writing, it managed to claw back some of its losses and was down 16.2% or 23 sen at RM1.19, valuing it at RM916.5 million. The stock has fallen 48% in the past month.
In a note today, CIMB Securities warned of a 30% decline in its earnings for the year ending June 30, 2025 (FY2025) because of delays in new order wins from one of the automotive manufacturers adopting a more cautious approach to capacity expansion.
“We are turning cautious about Genetec’s business outlook,” the research house said.
CIMB downgraded the stock to “hold” from “buy” and slashed its target price to RM1.60 from RM3.70 previously.