KUALA LUMPUR: Maybank Equity Research remain Buyers of Notion Vtec at RM2.79 after its 1QFY10 results met expectations.

Notion Vtec is a leveraged play on rising outsourcing opportunities in the HDD and digital camera markets.

Valuations are cheap for a growth stock with high scalability prospects and an improving track record.

"Our unchanged RM4.20 target price implies a total return of 53%. 1QFY10 net profit grew 9% QoQ and 14% YoY to RM14m, on an expanded EBIT margin (+1.1-ppt QoQ, +12.7-ppt YoY), in line with our
and market expectations," it said.

Notion Vtec's net profit doubled to RM14.19 million in its first quarter ended Dec 31, 2009 (1QFY10) from RM7.24 million due to a recovery in all business segments and favourable foreign exchange rates.

Revenue rose 24.4% to RM56.33 million from RM45.28 million, while basic earnings per share (EPS) doubled to 10.08 sen from 5.15 sen.