Clear direction ahead for Mi Tech
KUCHING: Public Investment Bank Bhd (PublicInvest Research) came away from Mi Technovation Bhd’s (Mi Tech) analyst briefing with more guidance on the type of acquisition deals that they are targeting in the near-term.
Following the maiden contribution from Taiwanbased Accurus Scientific, the semiconductor material business unit (SMBU) is expected to continue growing with the commercial operation of the Ningbo plant in early-2022.
These led PublicInvest Research to continue liking the exciting growth in the company through organic capacity expansion and multiple acquisitions, which will propel the company forward.
“During the first half of financial year 2021 (1HFY21), Mi Tech’s semiconductor equipment business unit (SEBU) generated total equipment revenue of RM144 million, with markets in China contributing 43 per cent followed by Taiwan (37 per cent), Southeast Asia (nine per cent) and North America (seven per cent).
“Mi Series equipment sales (die sorting) made up more than 90 per cent of the SEBU sales,” it added.
“The strong demand from its customers in China was mainly attributable to strong consumption for 5G-enabled smartphones and wireless electronics during the pandemic.”
Meanwhile, SMBU contributed maiden sales of RM27 million following completion of the Accurus Scientific acquisition on April 19 this year. The solder ball business derived most of its revenue from Taiwan, making up 62 per cent with China coming in second with 20 per cent.
The Taiwan-based Accurus Scientific is currently running beyond full capacity and production workers are working extra hours to fill up the orders.
Meanwhile, its new plant in Ningbo, China, which is 2.5 times bigger than the production plant in Tainan, Taiwan, is scheduled to be commercially operational early next year and will focus on a wide range of solder ball products for the Taiwan and US customers who are based in China.
The new plant will take up to three years to fill up to full capacity.
“Management plans to set up the third business unit, which is semiconductor manufacturing and specific process services by 2024,” PublicInvest said of Mi Tech’s future plans.
“The fourth business unit called technology intensive commercial products is slated to be established by 2026.
Meanwhile, it is targeting up to RM1 billion worth of acquisitions in China, Taiwan and Korea to expand the portfolio for SEBU. It has also set aside RM145 million to RM185 million to acquire two chemical companies in EU and US, which have strong exposure to automotive industry and semiconductor high-end package that can complement its newly acquired solder ball business.
“Management also voiced its plan to increase its solder ball business penetration in the Southeast Asian market through its Batu Kawan plant. All-in, it has set its sight on acquisition deals of up to RM1.1 billion.
“Finally, it plans to roll its new Mi series equipment called Mi 50, in the 4Q during the upcoming Semicon Taiwan Taipei show.”