Review

• MPI’s 9MFY24 net profit of RM81.4mn came in below expectations, accounting for 52.7% and 61.0% of ours and consensus full-year estimates, respectively. The variance was mainly due to weaker-than-expected demand across the consumer and commercial segments.

• A second interim dividend of 25.0sen/share was declared, bringing the YTD dividend to 35.0sen/share.

• YoY, 9MFY24 net profit surged 53.1% to RM81.4mn from RM53.2mn, mainly driven by lower operating expenses, a stronger USD versus Ringgit, and higher interest income. Meanwhile, revenue remained steady at RM1,562.0mn.

• QoQ, 3QFY23 net profit showed a modest increase of 1.9% to RM32.8mn while revenue was 0.6% higher at RM526.1mn. The stronger bottom line was largely due to a decrease in operating expenses and an increase in interest income.

Impact

• Maintain earnings forecasts pending an analyst briefing later.

Outlook

• Generally, we remain optimistic about MPI’s medium to longer-term prospects, underpinned by its strengthening product portfolio and automotive-centric strategy. The group will continue to focus on investments in electric vehicles, silicon carbide and gallium nitride technologies, 5G testing, and MEMS sensors, among others

Valuation & Recommendation

• We put our call Under Review, pending an analyst briefing later, with an unchanged target price of RM36.20/share based on a PE multiple of 28.0x CY25F EPS.

Source: TA Research - 17 May 2024