Unisem active, up 5.2% on stronger US dollar

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KUALA LUMPUR (May 14): Semiconductor manufacturer Unisem (M) Bhd's shares rose as much as 13 sen or 5.2% to RM2.63 in morning trades today, as the US dollar edged higher.

The ringgit was quoted at 3.5747 versus the greenback.

Unisem shares were traded at RM2.59, up nine sen or 3.6% with some 7.3 million shares traded as at 12.29pm.

Its warrant stocks UNISEM-WA also increased in tandem rising 0.2 sen or 7.27% to trade at RM29.5 sen.

A dealer who declined to be named when contacted by theedgemarkets.com said the company is a net beneficiary of a stronger US dollar versus the ringgit which is good for the semiconductor sector.

The dealer also added that Unisem being export-oriented insulates against the weak ringgit, noting that the company also recently posted higher net profits.

According to Bursa Malaysia filings, the company posted a net profit of RM23.54 million for the first quarter ended March 31, 2015 (1QFY15) as compared to RM9.27 million for FY14 on higher gross profit margin arising from change in product mix and improved utilisation rates.

Revenue also grew 23% year-on-year to RM280.1 million.

On April 29, CIMB Research in a note said it has maintained its “Add” rating on Unisem at RM2.43 with a higher target price of RM2.65 (from RM2.50) and said Unisem’s 1Q15 core net profit was slightly ahead of house expectation at 25% of its full-year estimate, but in line with consensus at 21%.

Unisem manufactures and sells semiconductor devices, and provides other related services to electronics companies. The company has operations in Malaysia, the United Kingdom, China, Indonesia and the United States.