• Overview. 4QFY19 core earnings fell 9% yoy on weaker revenue amidst lower volume loadings from all geographical segments (Table 2). On qoq basis, core earnings surged over 100% due to low base effect in 3QFY19.
• Key highlights. FY19 EBITDA margin remain stable at 24% despite poor performance (FY18: 24.9%). This was due to favourable mix of high margin products derived from the automotive segment.
• Against estimates: Inline. FY19 core earnings fell 11% dragged by poor 3QFY19 performance. Against estimates, it came inline with our expectations at 99% but trailed consensus at 91%.
• Outlook. We remain cautious over its prospects as the global semiconductor outlook remains challenging amidst the US-China trade tension. Notwithstanding, we expect MPI to sustain EBITDA margins over 24-27% amidst its portfolio transformation program which focuses on high margin products.
• Our call. Our coverage on MPI is non-rated after it was excluded from the SC’s Shariah-compliant stock in Nov 2018. Management guided that necessary actions are underway to ensure MPI is being re-included in the Shariah list come Nov 2019 release.

Source: BIMB Securities Research - 29 Aug 2019