Mi Equipment hits new growth milestone with expansion of product line
KOTA KINABALU: Mi Equipment Holdings Bhd (Mi Equipment) has hit a new milestone in growth with the expansion of its product line into new product segments during the second quarter of 2018 (2Q18).
In a securities report, analysts at Affin Hwang Investment Bank Bhd (AffinHwang Capital) reported that the equipment manufacturer of wafer level chip scale packaging (WLCSP) sorting machines for the semi-conductor industry has branched its product line with its first units of Si- and Li- series equipment.
“(This) essentially opens itself to the fan out Wafer Level packaging sorting equipment (Li Series and testing equipment (Si Series),” explained the analyst.
“We had initially thought that most of Mi Equipment’s newer products were primarily at the development stage and built for its customers for demo purposes only. The quicker than expected penetration into these new market segments highlights Mi’s product quality and demand for its products,” said the analyst.
With its reach into new market segments, Mi Equipment is expected to be able to grow its orderbook backlog for this new equipment – making full use of its new Bayan Lepas factory capacity that is set to come on stream in 1Q19.
“This should at the same time quash concerns over underutilisation at its new plant,” commented the analyst.
Another positive aspect of this product line expansion for Mi Equipment is its securement of a new customer and its start of a new business segment.
“As Mi Equipment grows and diversifies its customer base, this should further enhance its growth while reducing future earnings volatility. Management has also guided that it has kick started its precision-engineering business, which would eventually be parked at its future Batu Kawan facility,” AffinHwang Capital shared.
With renewed confidence on the stock, AffinHwang Capital said: “We remain positive on Mi Equipment as a proxy to growth in the adoption of wafer level packaging. Downside risks to this call is the cyclicality risk of the semiconductor industry,” said the research arm.