MPI’s earnings to pick up in 2HFY18
KUCHING: Malaysian Pacific Industries Bhd’s (MPI) first quarter of financial year 2018 (1QFY18) core net profit has come in within expectations, with analysts projecting that earnings will pick up in 2HFY18.
As per the group’s filing on Bursa Malaysia, MPI’s profit for the current quarter ended September 30, 2017 amounted to RM43.83 million, down from RM49.61 million in the preceding year corresponding period.
MPI’s 1QFY18 core net profit came within AmInvestment Bank Bhd’s ( AmInvestment Bank) expectations and consensus at RM38 million.
The net profit accounted for 20 per cent and 19 per cent of AmInvestment Bank’s and street estimates, respectively.
“Note that this is after stripping out net forex losses amounting to RM1.3 million (net of gains from hedging),” it said.
The group declared a dividend of 10 sen per share during the quarter, in line with the researh firm’s projection.
Going forward, AmInvestment Bank believed earnings will pick up in 2HFY18 as the company’s new product introductions (NPIs) over the past three quarters translate into job wins.
“Note that it would typically take nine months to one year to progress from NPIs to commercial production, should customers decide to engage MPI.”
According to AmInvestment Bank, MPI’s prospects remain bright due to the company’s exposure in the automotive segment.
The research firm estimated MPI’s revenue from the automotive division will grow at a seven per cent compound annual growth rate (CAGR) from FY17-FY20F on the back of rising global light vehicle sales and growth in semiconductor content in automobiles.
AmInvestment Bank also projected that MPI is well positioned to ride on the wave of surging connected devices, as the group’s micro leadframe packages (MLPs) are ideal in the area of radio frequency (RF) applications.
In spite of MPI’s bright prospects, the research firm believed the company is fairly valued at this price.
MPI is currently trading at a current year 2018 forecast (CY18F) price earnings (PE) of 13.5-fold, while the average of the semiconductor manufacturing sector is 13-fold.