KUALA LUMPUR (May 31): Malaysian Pacific Industries Bhd (MPI) rose as much as RM1.60 or 4.3% to RM38.80 after the group achieved another record high quarterly earnings in the third quarter ended March 31, 2021 (3QFY21).

At 12.21pm, the counter pared some gains at RM38.74, still up RM1.54 or 4.14%. It was the top gainer this morning.

Kenanga Research’s analyst Samuel Tan said in a note today that MPI’s 3QFY21 core net profit (CNP) tripled year-on-year (y-o-y) to RM74.4 million, exceeding his expectations, while its 9MFY21 CNP of RM196.7 million (up 89% y-o-y) made up 82% of his full-year estimates.

“We expect earnings to remain on track to achieve our raised FY21 estimated forecast, fuelled by higher chip packaging demand for data centres, laptops and 5G radio frequency as plant utilisation remains high,” he said.

He raised his forecast of MPI's FY21 and FY22 CNP by 6% each to RM253.1 million and RM286.3 million, representing growth of 65% and 13%, respectively.

He maintained an "outperform" call on MPI and revised up its target price (TP) to RM47.50 from RM47.

BIMB Securities Research’s analyst Afifah Abdul Malek also revised up MPI's FY21 to FY23 earnings estimate between 26% and 32% after its 9MFY21 core profit surpassed his expectation.

“We expect sales contribution from automotive, consumer/communication and industrial to remain strong in tandem with an increase in demand globally for electric vehicles (EV), consumer electronics, data centre, and etc,” he said.

He maintained a "buy" call on the stock with a TP of RM45.

AmInvestment Bank Research’s analyst Dalilah Fairoz, however, maintained her "hold" call on MPI with an unchanged TP of RM36.05.

“We continue to like MPI but opine that the stock is fairly valued at the current share price,” she said, adding that the group's 3QFY21 results were in line with her expectation.

According to her, the group’s positive prospects arise from its portfolio rationalization strategy that focuses on higher-margin specialized projects; its leading market position in the ultra-thin micro leadframe packaging and increased R&D in micro-electro-mechanical systems sensors; its move towards producing silicon carbide power products with applications in EVs, servers, and renewable energy; and its strong net cash position of RM927 million as at March 31, 2021 which allows for strategic investments and merger and acquisition opportunities.

"Despite Covid-19 uncertainties and prospects of an uneven recovery of the global economy, the group believes that the semiconductor industry will show resilience and growth in FY21. We believe MPI’s pipeline continues to remain intact," she said.