KUALA LUMPUR (Sept 2): Malaysian Pacific Industries Bhd's (MPI) share price pared gains at Bursa Malaysia's afternoon break after rising to a record high as investors weighed the Hong Leong Group-linked electronic components manufacturer's latest quarterly and full-year financials.
Tuesday (Sept 1) overnight price gains in US-listed technology shares could have also influenced MPI's share trade on Bursa today.
At 12:30pm today, MPI's share price pared gains at RM18.04 to become the exchange's top gainer. The stock saw 517,100 shares traded.
At RM18.04, MPI has a market value of RM3.58 billion.
MPI's share price pared gains after rising as much as RM1.20 or 7.06% so far today to a record high of RM18.20.
On Friday (Aug 28), MPI reported that net profit rose to RM49.05 million in the fourth quarter ended June 30, 2020 (4QFY20) from RM30.06 million a year earlier.
Full-year net profit was higher at RM152.99 million versus RM128.33 million a year earlier.
Analysts who attended MPI's investor briefing yesterday wrote in their respective notes today that MPI is optimistic on its business outlook.
CGS-CIMB Securities Sdn Bhd analyst Mohd Shanaz Noor Azam said MPI is optimistic on stronger sales growth in FY21, "driven by a healthy product pipeline", albeit with delays in production ramp-ups by a few quarters due to ongoing challenges from the US-China trade war and Covid-19 pandemic.
TA Securities Holdings Bhd analyst Wilson Loo said MPI "reassured that the group’s pipeline remains intact and strong".
Loo said TA Securities had raised its FY21 and FY22 MPI earnings estimates by 15.1% and 12.4% to RM186 million and RM209.3 million respectively.
"We opine that the stock deserves a richer valuation in view of its stronger earnings growth profile.
"Hence, following the earnings upgrade and ascribing a higher PE (price-earnings) multiple of 21.0x (previously 15.0x) against CY21 (calendar year 2021) EPS, we arrive at a higher TP (target price) of RM20.90. Maintain buy," he said.
CGS-CIMB's Mohd Shanaz said the research firm reiterated its "add" call for MPI shares with a RM19.80 TP.
"Earnings accretive acquisitions, stronger recovery in the automotive sector and higher dividend payouts are potential re-rating catalysts, while an escalation in US-China trade tensions and the appreciation of the ringgit vs US$ are potential downside risks," he said.
At a glance across Bursa today, technology index constituents such as MPI and electronic component manufacturer JCY International Bhd appeared to take cue from price gains in US-listed technology shares.
JCY's share price settled up 16 sen or 23.7% at 83.5 sen with some 446 million units traded. The counter was Bursa's second-most active stock.
Overnight in the US, it was reported that the S&P 500 and Nasdaq boasted record closing highs on Tuesday with technology leading the charge as Apple and Zoom Video soared while economic data and moves toward stimulus talks in Washington helped fuel optimism.
Tuesday's rally added to Wall Street's fifth straight monthly gain and the S&P 500's strongest August advance in more than three decades, which was also mostly thanks to technology stocks and central bank support, Reuters reported.
Edited by Chong Jin Hun