Unisem to record decent 2Q, boosted by favourable forex

KUCHING: Unisem ( Malaysia) Bhd (Unisem) is expected to record decent results for the second quarter of 2015 ( 2Q15), boosted by favourable foreign exchange.

RHB Research Sdn Bhd ( RHB Research) in a recent report, expect Unisem’s 2Q15 core earnings to come in at RM28 million to RM35 million, boosted by the favourable US dollar environment, which averaged at RM3.66 vis-à-vis 2Q14’s RM3.23 and 1Q15’s RM3.39.

It also believed that the sales momentum for Unisem would likely be driven by its wafer level packaging and bumping division (30 per cent of 1Q15 sales).

Aside from that, it expected the group to make further inroads in expanding its communications-related market (consisting of 32 per cent of its 1Q15 sales).

“We do not expect any dividend to be announced for the quarter, as our FY15F dividend per share of seven sen (which would translate into an annual yield of 2.9 per cent) is likely to be announced in its second half of 2015 ( 2H15) results release,” it added.

Meanwhile, on Unisem’s warrants and employee stock option scheme ( ESOS), RHB Research said, “Unisem’s outstanding share base has increased to 695.6 million from 674.2 million as at December 31, 2014, due to outstanding warrants and ESOS conversion.

“We expect full conversion to take place by August, given that its existing warrants (at a RM2.18 exercise price and will expire by August 24) are currently trading at a slight discount, while its ESOS (at an exercise price of RM2.25) is set to expire by August 9 (albeit with an optional extension for an additional five years).

“Assuming full conversion for both, Unisem’s share base would increase by 26.9 per cent to 855.8 million, with a corresponding dilution in our earnings per share ( EPS) estimate.”