Friday 29 Mar 2024
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KUALA LUMPUR (April 26): BIMB Securities Research has maintained its “Sell’ rating on Unisem (M) Bhd at RM2.50 with a lower target price (TP) of RM2.05 and said Unisem’s 1Q19 core earnings were flat as the impact from weaker sales volume from both Asia (-15%) and Europe market (-9%) were more than offset by lower opex and MI charge off.

In a note today, the research house said Unisem’s core earnings slumped on quarter-on-quarter basis due to weaker sales volume and forex losses of RM2.4 million compared to RM800,000 gain in 4Q18.

“Overall, Unisem’s 1Q19 core earnings were only 6% of ours and consensus’ 2019F figures. We pare down FY19-21F core earnings between 15-21% to reflect lower-than-expected sales volume and higher low margin product mix.

“Maintain Sell with a lower RM2.05 TP (from RM2.50) which implies 2019F PE of 17x. We remain negative on its outlook given to uncertainty of US-China trade tension and moderate growth in smartphone sales,” it said.

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