• HLIB maintains BUY rating on UNISEM with an institutional target price of RM2.82, or 22% upside. Since hitting 52-week high of RM2.65 on 21 Apr, Unis em’s share prices corrected 15.8% (in tandem with the broader market consolidation and selling pressures by ESOS and conversion of warrants) to a low of RM2.23 before consolidating sideways to end at RM2.31 yesterday.
• HLIB still maintains a BUY rating on Unisem with an institutional target price of RM2.82, or 22% upside, supported by robust 49% EPS CAGR from FY14-16 and decent yields of 4.3%-5.5% for FY15-16.
• Anticipate a strong 2Q15 results. In anticipation of a positive 2Q15 results (scheduled to be released by end July/early August), Unisem share price is poised to break above the short-term downtrend resistance trend line (near RM2.38) soon.
• A decisive breakout above RM2.38 will spur prices to retest RM2.43 (50-d SMA) and RM2.55 (4 June high). Pushing past RM2.55 would give us the confirmation to achieve our long term objective of RM2.67 (5-year high on 3 May 2010).
• Critical supports are located at RM2.23 (S1) and RM2.10 (38.2% FR). Cut loss at RM2.09.

Source: Hong Leong Investment Bank Research - 8 Jul 2015