KUALA LUMPUR (Nov 25): RHB Investment Bank Bhd and TA Securities Holdings Bhd had on Thursday raised their Malaysian Pacific Industries Bhd (MPI) share target prices (TPs) to RM53.34 and RM64.15 respectively after upgrading their earnings forecasts for the semiconductor maker, which reported on Wednesday a record high quarterly net profit for the first quarter ended Sept 30, 2021 (1QFY22).  

According to RHB analyst Lee Meng Horng’s note, RHB lifted its MPI share TP to RM53.34 from RM50 previously while TA Securities analyst Wilson Loo wrote in a note that TA Securities raised its MPI TP to RM64.15 from RM60.85.

RHB and TA Securities maintained their "buy" calls for MPI shares, according to Lee and Loo.

On Wednesday, MPI said in Bursa Malaysia filings that 1QFY22 net profit climbed to RM81.68 million from RM55.31 million a year earlier while revenue rose to RM584.53 million from RM440.59 million.

MPI declared a dividend of 10 sen a share for 1QFY22.

On Thursday, Lee said MPI’s 1QFY22 core net profit at RM79.4 million, which excludes extraordinary items, "met expectations at 25.3% and 25.5% of our (RHB) and street’s full-year estimates [respectively]”.

"We keep our FY22F earnings forecasts, but lift FY23F-FY24F earnings by 8.7%-10.7% after factoring in higher growth assumptions on the back of sustained demand and contribution from new capacity," he said.

At TA Securities, Loo said that while MPI's 1QFY22 earnings accounted for 25.6% and 26.3% of TA Securities' and consensus full-year estimates respectively, it deemed MPI’s results as slightly above expectations considering that the quarter did not reflect a fully restored workforce as Malaysia’s manufacturing sector contended with Covid-19-driven movement restrictions to curb the spread of the pandemic.

"For reference, during MPI’s 4QFY21 investors’ briefing in early September 2021, management guided that the group’s workforce capacity was recovering from the 60% limitation in June 2021, though it had only reached 75% then.

"We have revised our FY22/FY23/FY24 earnings estimates [for MPI] by +6.9%/+4.2%/+1.6% upon raising sales assumptions for the corresponding period by 3.5%/2.2%/0.8% to reflect actual 1QFY22 results.

"We continue to like MPI for its robust sales pipeline backed by the continued enhancement of its product portfolio, strength and growing exposure to the automotive segment, expansion plans, and robust balance sheet,” he said.

At the time of writing, MPI’s share price increased 58 sen or 1.2% to RM48.72, giving the company a market capitalisation of about RM9.67 billion.

MPI has 198.4 million issued shares, according to its latest quarterly financial report.