AllianceDBS Research maintains Hold on MPI, cuts target price to RM5.45

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KUALA LUMPUR (Nov 13): AllianceDBS Research has maintained Hold on Malaysian Pacific Industries Bhd (MPI) at RM5.15 with a lower target price of RM5.45 (from RM5.90) and said the company’s 1QFY15 net profit of RM19.9 million was 6% below estimates due to weaker sales and higher taxation

In a note Thursday, the research house said the near-term weakness was due to weaker demand by few key customers and inventory adjustment.

It trimmed FY15F/FY16F EPS by 9%/4%.

AllianceDBS Research said the interim 7sen dividend per share was higher than last year (5sen).

“Given the near-term weakness, we lowered the target valuation for MPI to 1.4x FY15 BV (previously 1.5x) and derived a target price of RM5.45 (with 10% ROE).

“This is in line with our target valuation for Unisem and consistent with global peers valuation in the OSAT industry. We maintain our Hold rating,” it said.