KUALA LUMPUR (Sept 10): Electronics manufacturing services firm VS Industry Bhd (KL:VS), which recently saw share disposals by key management, declined sharply in active trading on Wednesday.

Its shares closed 10 sen or 15.63% lower at 54 sen, valuing the company at RM2.13 billion. The counter had fallen as much as 18.75% to 52 sen during the day.

With a turnover of 148.14 million shares, VS Industry was the most active stock on Wednesday.

While a definitive reason for the share decline could not be immediately established, the company is flanked by demand uncertainties surrounding US tariff measures besides question marks over the recent share disposals.

When contacted, VS Industry said the company is not in a position to comment on share price movements or directors’ trading activities.

“Our operations remain intact with no disruptions, and we continue to fulfil customer orders. We acknowledge the operating environment is challenging with uncertainties from tariff measures and rising cost pressures, which may impact our performance.

“We are in close dialogue with our customers, but we believe it would take some time for greater clarity on post-tariff order flows to emerge. Importantly, our strong balance sheet and healthy cash holdings continue to underpin the group’s ability to navigate this taxing period,” the company said.

“In addition, contrary to some market talk, our customer base remains stable and our operations in the Philippines continue to make progress, with gradual ramp-up in production,” it added.

The company's executive chairman and largest shareholder, Datuk Beh Kim Ling, and his son and executive director Beh Chern Wei have been disposing of shares since Aug 25.

Based on bourse filings, Kim Ling sold a total of 97.85 million shares, a 2.54% stake, for a cumulative RM60.35 million since Aug 26. The disposals, comprising nine transactions, slashed his direct stake in the company to 5.24%, while his indirect stake stood unchanged at 7.29%.

Meanwhile, Chern Wei has disposed of 10.82 million shares, a 0.28% stake, for a cumulative RM7.05 million since Aug 25. His direct stake was trimmed to 3.1%.

Besides the moves by Kim Ling and Chern Wei, concerns have also been raised on VS Industry’s performance for this fiscal year.

VS Industry is expected to release this month its financial results for the fourth quarter ended July 31, 2025 (4QFY2025) along with the full-year figures.

The company's net profit for 3QFY2025 declined 56.3% from a year earlier to RM23.77 million, while topline dropped 10% to RM909.42 million. Cumulative net profit for the nine months fell by more than 41% year-on-year to RM69.75 million.

The weaker earnings were attributed to lower orders from customers, higher operating expenses and unfavourable foreign exchange rates. This came amid tariff measures from the US, a key market for the group.

In the filing in June, VS Industry flagged that certain customers adjusted their orders in response to the US tariff development. For context, the US was the second-largest topline contributor at 32.7% in FY2024, according to the group’s 2024 annual report.

Five of 12 analysts covering VS Industry have “buy” calls on the stock, with an average target price of 88 sen. The others have the counter on “hold”.

The weaker earnings and tariff uncertainties led some analysts to trim earnings forecasts back in June. CIMB Securities slashed its FY2025 net profit forecast by 20%, while HLIB Research cut its forecast by 12.7%.