Overview. MPI’s 4QFY21 core profit rose 28% yoy and 8% qoq to RM66m in tandem with its breaking record high revenue in 3QFY21 (+33% yoy, +2% qoq) despite its Malaysia operations running at 60% utilisation rate due to restriction orders. Improvement in core profit was also backed by lower net opex during the quarter which saw EBITDA increased 34% yoy and 8% qoq to RM146m.

Key highlights. All markets reported improvement yoy with Europe recording the highest growth (+60%), followed by the US (+30%) and Asia (+25%) (Table 2). Still, Asia market remains the main contributor to MPI’s revenue at 63%.

Against estimates: inline. MPI’s FY21 core profit grew 61% yoy to RM253m, primarily on higher sales and better cost control. Overall, FY21 core profit was inline with our and consensus’ estimate at 100%.

Outlook. We anticipate MPI’s earnings to grow strongly in FY22 upon lifting of the 60% utilisation rate for Malaysia’s plants operations coupled with continuous strong demand across all products i.e. consumer/communication, industrial (data centre), PC/Notebook and recovery in automotive.

Our call. We change our call to HOLD from BUY on the stock with unchanged TP of RM45.00, pegged at 30x PER on FY22 EPS of 150 sen. The share price has risen 18% since our MPI’s 3QFY21 results reporting (30 May 2021) on positive market sentiment over strong global semiconductor sales, coupled with resilience of China’s economy, which MPI owns a plant in Suzhou, China. Accumulate on dips

Source: BIMB Securities Research - 1 Sept 2021