KUALA LUMPUR (April 26): Unisem (M) Bhd shares rose 1.84% in early trade this morning after CIMB IB Research maintained its “Hold” rating on Unisem at RM3.26 with a higher target price of RM3.40 (from RM2.90) and said Unisem’s 1Q17 core net profit was slightly ahead of house/consensus expectations at 28%/27% of FY17 forecasts due to higher-than-expected utilisation and average selling price (ASP).

At 9.20am, Unisem rose 6 sen to RM3.32 with 251,400 shares traded.

In a note today, the research house said Unisem’s core net profit in 1Q17 rose 33% y-o-y due to higher utilisation and ASP from forex movements, but fell 11% q-o-q due to the strengthening of the ringgit against US dollar (US$).

It said Unisem’s management is guiding for 5% revenue growth in US$ terms for 2Q17, driven by robust demand in wafer bumping and wafer-level chip-scale package in China.

“We raise FY17-19F EPS forecasts by 4-9% due to higher utilisation and forex.

“Maintain Hold with a higher RM3.40 target price based on 14x CY18 P/E, in line with the sector mean (12x prev.). We prefer Inari Amertron Bhd for exposure in the tech sector,” it said.