Company Background. Mi Technovation (Mi) is principally involved in the design, development and manufacture of wafer-level chip scale packaging sorting machines for the semiconductor industry. It operates under 2 main segments: semiconductor equipment business unit (SEBU) and semiconductor material business unit (SMBU). Mi serves customers in Asia and the United States.

Prospects. (i) Sales in SEBU remain robust due to its diversified solutions strategy and promising aspects in the advanced die sorting and laser bonding technology that focus on the high performance computing (HPC) segment. (ii) Focus on R&D to develop and release new products such as new Vi Series models to capitalise on opportunities in the silicon defects inspection process from highend flip chips, SiP and 2.5D packages. (iii) SMBU is expected to grow rapidly with its new semiconductor manufacturing plant in Ningbo, China - apart from its existing manufacturing site in Tainan, Taiwan.

Financial Performance. In 4QFY22, Mi posted a higher revenue of RM117.2mil (+30% YoY) with a PAT of RM17.1mil (+29% YoY), driven by consistent demand from Taiwan & China customers. In FYE22, group revenue increased to RM389.5mil (+3.7% YoY) with a PAT of RM68.9mil (+11.3% YoY). This was mainly due to customers’ capex spending timing and sustainable production volume in Taiwan & China markets as well as its key customers in material business showing strong market share growth.

Technical Analysis. We expect further upside for Mi after it posted a long white candle and hit its 10-month high 2 sessions ago. The stock’s move above the RM1.80 resistance also coincides with an upside gap, suggesting that a bullish outlook can be expected here. A bullish bias may emerge above the RM1.80 level, with a stop-loss set at RM1.58, below the 20-day EMA. Towards the upside, the near-term resistance level is seen at RM2.30, followed by RM2.50.

Source: AmInvest Research - 27 Feb 2023