KUALA LUMPUR (July 28): Kenanga IB Research has maintained its “Outperform” rating on Malaysian Pacific Industries Bhd (MPI) at RM6.51 with an unchanged target price of RM8.90 and said it viewed its share price weakness as a good opportunity for accumulation.
In a note today, the research house said it came away from MPI’s Analysts Day with its Positive conviction reaffirmed by management’s vision and forward strategies that focus on: (i) high growth (Internet of Things) and defensive (Automotive) segments, (ii) product portfolio restructuring (towards higher margins products), and (iii) competitive positioning with products and manufacturing standards differentiation.
“Besides its technical edge and strategic product exposures that augur well for the current and upcoming for tech wave, we also like the management’s foresight in embracing various tech-cycles.
“We view its share price weakness as a good opportunity for accumulation. We reiterate our Outperform recommendation with an unchanged target price of RM8.90.
“This is based on a 15.5x FY16E EPS, a valuation which is broadly in line with the forward valuation of OSAT players in Malaysia,” it said.