CIMB Upgrades ViTrox to 'Buy', TP Raised to RM5.90

Why It Matters

The upgrade signals confidence in ViTrox’s ability to capture AI‑driven demand and deliver margin‑expanding growth, positioning it as a key player in Malaysia’s high‑tech manufacturing sector.

Key Takeaways

• CIMB raises ViTrox target to RM5.90, upgrades to Buy.
• FY26 revenue forecast up to RM274 million, 94% YoY growth.
• New QX1 Series targets AI servers, telecom, automotive markets.
• Tax incentive lowers effective rate to low teens by 2026.
• Service contracts to drive double‑digit growth through FY28.

Pulse Analysis

ViTrox Corp Bhd has positioned itself at the forefront of Malaysia’s machine‑vision ecosystem, a segment that is benefitting from the broader surge in artificial‑intelligence applications across semiconductor packaging, data‑center hardware and autonomous vehicles. The company’s MVST and ABI product lines address high‑speed inspection needs that traditional optics cannot meet, and the recent launch of the QX1 Series adds 3‑D X‑ray capability for AI‑driven server and automotive modules. This technological edge aligns with global demand for higher yield and tighter quality control, making ViTrox a strategic supplier for both domestic and export markets.

The upgrade by CIMB Securities to a Buy rating and the increase of the target price to RM5.90 reflect confidence in ViTrox’s earnings trajectory. By raising FY26 and FY27 EPS forecasts up to 15 percent and projecting a 31 percent two‑year net‑profit CAGR, analysts anticipate margin expansion from the product upgrade cycle and a favorable tax environment. A newly awarded five‑year incentive from MIDA will slash the effective tax rate to the low‑teens by 2026, offsetting foreign‑exchange headwinds from a stronger ringgit. Capacity expansions at Campus 2 and the upcoming AXI line at Campus 3 further de‑risk supply constraints.

Beyond equipment sales, ViTrox’s service business is emerging as a stable earnings pillar. With service revenue already up 18 percent and a growing installed base of AXI machines, post‑warranty contracts are expected to generate double‑digit growth through FY28. This recurring revenue stream reduces exposure to the cyclical nature of capital‑equipment orders and improves overall profitability. For investors, the combination of robust order books, AI‑driven market tailwinds, and a clear path to lower tax burdens creates a compelling case for sustained upside in the Malaysian technology sector.