VS Industry poised for re-rating as earnings recover, orders improve
KUALA LUMPUR: VS Industry Bhd could see a re-rating as improving orders, higher plant utilisation and customer diversification support an earnings recovery, said UOB Kay Hian Research.
VS Industry Bhd could see a potential re-rating as its earnings improve, driven by stronger orders, higher plant utilization, and customer diversification, according to UOB Kay Hian Research. The electronics manufacturing services provider's established capabilities, technical expertise, and spare capacity could enable it to secure new programs as customers diversify their manufacturing operations, potentially boosting earnings growth.
VS Industry returned to profitability in the fourth quarter of 2026, posting a core net profit of RM21.4 million compared to a loss of RM32.9 million in the previous quarter and RM18.4 million a year earlier. Despite a four percent year-on-year revenue decline to RM3.7 billion, the Q4 recovery was bolstered by a 24 percent quarter-over-quarter increase in revenue due to improved orders at its Malaysian and Philippine operations.
VS Industry's Indonesian operations remained profitable, with pre-tax profit more than doubling to RM3.1 million in 2026. The Philippine operations, however, experienced a narrowing quarterly pre-tax loss to RM3 million from RM7 million as utilization improved and additional models entered production. The company's Indonesian operations are expected to benefit further from the commencement of a third production line, while UOB maintains its Buy rating on VS Industry with an updated target price of 35 sen, up from 34 sen.
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