• Overview. MPI’s 3QFY22 core profit grew 36% yoy to RM83.6m in tandem with strong sales across its key markets and better cost control. Meanwhile, the EBITDA margin was well maintained above 30% in 3QFY22 and expanded 5.6ppt to 31.4% from 25.8%. However, on a qoq basis, core profit fell 11% mainly due to increase in operating cost, higher depreciation, and finance cost.

• Key highlights. Asia market remains the biggest contributor to revenue at 63% with 18% yoy growth. Meanwhile, the US recorded the strongest growth (23% yoy) during the quarter followed by Europe (8% yoy) (Table 2).

• Against estimates: inline. MPI’s 9MFY22 core profit rose 40% yoy to RM263m due to improvement in sales across its key market segments. Overall, MPI’s 9MFY22 core profit was in line with our and consensus’ estimates of 80% and 79% respectively.

• Dividend. A 25 sen second interim DPS (3QFY21: 20 sen) was declared, which implies a 59% dividend payout. This brings 9MFY22 total DPS of 35 sen (9MFY22: 30 sen), up 17% yoy.

• Outlook. Despite the crisis and challenges faced by the company amid continuous supply chain disruption, prolonged lockdown in China, and the Russian-Ukraine war, we believe MPI business to remain resilient owing to diversified customers and product portfolio, as well as ongoing cost optimisation that would provide sustainable earnings growth to the company.

• Our call. Maintain BUY at TP of RM49.40, pegged at 30x PER on FY22 EPS of 164.7 sen

Source: BIMB Securities Research - 27 May 2022