MPI garners reaffirmed positive conviction

KUALA LUMPUR: Malaysian Pacific Industries Bhd’s (MPI) has garnered a reaffirmed positive conviction from analysts following an update with analysts.

According to the research arm of Kenanga Investment Bank Bhd (Kenanga Research), this stemmed from new products positioning as well as strategic exposure in different segments, growth potential of MPI’s key segments and investment in automation to improve operational efficiency.

While worldwide semiconductor market is expected to grow by only 2.7 per cent in 2018, management is looking at a more optimistic US dollar top-line growth of 5.5 to 7.5 per cent in financial year 2018 (FY18), vis-à-vis Kenanga Research’s conservative growth of one per cent, which will be driven by MPI’s new products and strategic positioning in both high growth (communication) and defensive (automotive and industry) segments.

The research arm believed this is highly possible considering the new products roadmap (advance packaging and testing, new thermal materials), not to mention the commencement of production for advanced sensors starting from the third quarter of FY17 (3QFY17) that have already passed the stringent qualification stage.

“Besides top-line growth strategy, the group is also investing in higher automation (with better yield and higher efficiency ), which will eventually evolve into Industrial 4.0,” it said.

Kenanga Research highlighted that MPI’s automotive, communication and industrial segments would be key focus areas in anchoring growth for the next few years, as noted by management.

“On the automotive side which contributed 25 per cent as of 3QFY17, advanced sensors packaging projects that started few years back will finally see fruition with production commencing from July 2017 for top global auto components suppliers,” it said.