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Today I want to share about a potential semiconductor company that you might not heard before - VISDYNAMICS HOLDINGS BERHAD (VIS - 0120)
This MELAKA based company could be one of the uprising potential in 2022 as the growing demand in the semiconductor sector continue to see supply not able to cope with demand.
As you can see, when we think of semiconductor IT company, usually we will think about Penang. Penang is a house to big local player such as Vitrox, Pentamaster, MMSV and etc.
But actually, Melaka is also a place where prominent semiconductor electronic player gathers around.
Melaka have prominent MNC player which are servicing the automotive industry such as INFINEON, DOMINANT OPTO, POSSEHL ELECTRONICS and others.
VIS is a key supplier to some of this prominent MNC which supplies IC and Chips to automotive industry and digital electronic good. Among them will be customer such as INFINEON TECHNOLOGIES which is planning to ramp up more production of chips.
According to news report, INFINEON will need to ramp up production to cater for the demand of the chip in the automotive sector. The share price of INFINEON had been on the rise as chip shortage push up prices.
The management at VIS had foresee that demand will pent up more as more usage of electronic will be needed in electric vehicle. The company had in November 2020 purchased 3 pieces of land in Melaka to expand their research and development as well as production.
The plant will be slated to be operational at mid of 2022, which will be looking to contribute to the financial performance of the company.
IS VIS STILL ATTRACTIVE DESPITE SHARE PRICE AROUND RM 1.50 ?
There are several reason to see VIS having more potential upside at the current market price
1. With 174.5 million shares issued, at the current price of RM 1.50, VIS market capitalization is just RM 263 million. There are plenty of upside as the company growth prospect is bright and demand of it's product are needed more and more. A well performing semiconductor company can easily ace into RM 1 billion market capitalization.
2. VIS can transfer listing into the main market with the current performance, which will open up more fund house / unit trust to invest into the company.
3. VIS current share base of 174.5 million can be candidate of bonus issue in the future.
4. The unique product that VIS offer can give an operation gross margin of 50% which is very high and lucrative. With the expansion completion in 2022, should VIS can score RM 100million in revenue, we can expect RM 50 million in gross profit margin.
I tend to believe that if key customer continue to place more order with VIS for it's product, they will also buy the shares of VIS which will see VIS share price heading higher. This will be a win win situation for the customer and for VIS in a whole.
As you can see, when we think of semiconductor IT company, usually we will think about Penang. Penang is a house to big local player such as Vitrox, Pentamaster, MMSV and etc.
Melaka have prominent MNC player which are servicing the automotive industry such as INFINEON, DOMINANT OPTO, POSSEHL ELECTRONICS and others.
The management at VIS had foresee that demand will pent up more as more usage of electronic will be needed in electric vehicle. The company had in November 2020 purchased 3 pieces of land in Melaka to expand their research and development as well as production.
The plant will be slated to be operational at mid of 2022, which will be looking to contribute to the financial performance of the company.
IS VIS STILL ATTRACTIVE DESPITE SHARE PRICE AROUND RM 1.50 ?
There are several reason to see VIS having more potential upside at the current market price
1. With 174.5 million shares issued, at the current price of RM 1.50, VIS market capitalization is just RM 263 million. There are plenty of upside as the company growth prospect is bright and demand of it's product are needed more and more. A well performing semiconductor company can easily ace into RM 1 billion market capitalization.
2. VIS can transfer listing into the main market with the current performance, which will open up more fund house / unit trust to invest into the company.
3. VIS current share base of 174.5 million can be candidate of bonus issue in the future.
4. The unique product that VIS offer can give an operation gross margin of 50% which is very high and lucrative. With the expansion completion in 2022, should VIS can score RM 100million in revenue, we can expect RM 50 million in gross profit margin.
I tend to believe that if key customer continue to place more order with VIS for it's product, they will also buy the shares of VIS which will see VIS share price heading higher. This will be a win win situation for the customer and for VIS in a whole.
