KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
ViTrox Corp’s outlook has dimmed amid growing concerns over looming US tariffs, prompting more analysts to issue ‘sell’ calls despite the company’s latest earnings meeting expectations.
Key Points:
Analyst Downgrade: Hong Leong Investment Bank (HLIB) downgraded the stock after Q2 results, citing valuation risks and tariff uncertainty.
Current Ratings: 5 ‘Sell’, 3 ‘Hold’, 4 ‘Buy’.
Average Target Price: RM3.21 — implying a potential 13% downside from Friday’s RM3.72 close.
Valuation Concerns:
Shares have rebounded 60% from April lows, but now trade at ~49x forward earnings.
HLIB warns the valuation “appears stretched” given demand risks from possible US tariffs.
US Tariff Risk:
US President Donald Trump has hinted at 15% to 50% reciprocal tariffs, with an Aug 1 deadline.
A blanket 25% tariff on Malaysian goods is being considered, alongside sector-specific tariffs on semiconductors.
Tax Incentive Uncertainty:
ViTrox’s pioneer status tax incentive expired in June 2025.
HLIB flagged risk of non-renewal, while CIMB remains optimistic a new scheme will be approved by year-end, calling it a key re-rating catalyst.
Earnings Snapshot (2QFY2025):
Net Profit: RM28.13M (flat YoY)
Revenue: RM183.04M (+30% YoY)
Growth driven by automated board inspection and machine vision systems, offset by a higher tax provision.
Conclusion & Takeaways:
US tariff uncertainty is the biggest overhang, with potential to hit both demand and margins.
Valuation is at a premium, leaving little buffer against negative developments.
Renewal of tax incentives could help sentiment, but for now, analysts are leaning bearish.
Bottom line: ViTrox faces a critical few months ahead, with both tariffs and tax policy outcomes likely to determine whether the stock maintains its rally—or faces a pullback.
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