Mi Technovation’s ‘outperform’ call stays

Mi Technovation Bhd’s first quarter core earnings ended March 31, 2024 were in line with Public Investment Bank Bhd (PublicInvest) and consensus full-year expectations, making up 22.6 per cent and 23.4 per cent, respectively.

The company saw its first quarter of 2024 core earnings surge 117.5 per cent year-onyear to RM17.4 million, excluding the impact of foreign exchange gain (RM10.5 million) and losses from minority interest in 90 per cent-owned Mi Equipment Korea (RM0.4 million).

“Losses from the Korean operations shrank substantially. We believe Mi Technovation has successfully delivered the first laser assisted bonding equipment.

“Nevertheless, we lower financial years 2024 to 2026 forecast earnings by seven to nine per cent after imputing a more conservative stance on equipment deliveries,” PublicInvest said in a note yesterday, maintaining an “outperform” call on Mi Technovation with a new target price of RM2.67.

The company’s operating profit margin expanded from 14 per cent to 20.8 per cent due to higher capacity utilisation.

PublicInvest noted that the company incurred a small start-up cost of RM0.3 million for the new Semiconductor Solutions Business Unit, which is involved in high power modules and devices for wide bandgap applications in the automotive and renewable energy segments in Hangzhou, China.

Mi Technovation’s first quarter of 2024 revenue jumped 40 per cent year-on-year, due to stronger sales from both Semiconductor Equipment Business Unit (SEBU) and Semiconductor Material Business Unit (SMBU) segments.

PublicInvest noted that SEBU sales surged 56.8 per cent to RM61.3 million, due to robust orders for the Mi Series in Malaysia and more deliveries of Si Series equipment in China for the 30.75 per centowned Talentek Microelectronics (Hefei).

On the other hand, SMBU sales grew 21.5 per cent year-on-year to RM45.8 million driven by increased sales in solder balls from Accurus Taiwan and Accurus China.

PublicInvest also highlighted that the company is sitting on a net cash position of RM386.9 million up to the first quarter of 2024 .

Mi Technovation had also acquired an additional 5.21 per cent stake in Talentek Microelectronics (Hefei) for 27 million yuan, raising its holdings to 30.75 per cent