Review

• Excluding an exceptional gain on share-based payment amounting to RM38.4mn, MPI’s FY24 core profit of RM126.0mn came in below expectations, accounting for 81.6% and 77.5% of ours and consensus fullyear estimates, respectively. The variance was mainly due to weaker-thanexpected demand across the consumer and commercial segments.

• YoY, FY24’s core profit jumped 105.4% to RM126.0mn, primarily owing to favourable exchange rates, higher interest income, and lower operating expenses. On top of that, the group saw its revenue jump 2.5% to RM2,094.9mn, thanks to higher revenue contributions from the USA.

• QoQ, 4QFY24’s core profit fell 79.3% to RM9.2mn, although revenue was 1.3% higher at RM532.8mn. The weaker bottom line was largely due to the higher cost of sales.

• It maintained a robust balance sheet with a net cash position of RM1.0bn as at end-4QFY24.

Impact

• Maintain earnings forecasts pending an analyst briefing later.

Outlook

• Generally, MPI will continue to focus on investments in electric vehicles, silicon carbide and gallium nitride technologies. Additionally, the group intends to allocate more resources to beef up its advanced packaging capabilities in order to move up the value chain.

Valuation & Recommendation

• We put our call Under Review, pending an analyst briefing later, with an unchanged target price of RM42.30/share based on a PE multiple of 32.0x CY25F EPS and a 3% ESG premium.

Source: TA Research - 28 Aug 2024