MPI charted yet another record-breaking quarter with its 4QFY21 core net profit at RM75.1 million, up 53 per cent y-o-y and one per cent q-o-q, bringing its FY21 CNP to an all-time high of RM271.8 million and generally exceeding expectations.
KUCHING: Malaysian Pacific Industries (MPI) was the top most active stock on Bursa Malaysia today, with analysts pegging the stock to be poised for another record year, driven by the surge in demand for chips in data centres and the automotive space.
The stock rose by 98 sen yesterday to close at RM45 per share, with 611,700 shares traded.
In a report, the research team at Kenanga Investment Bank Bhd (Kenanga Research) noted that MPI charted yet another record-breaking quarter with its fourth quarter of FY21 (4QFY21) core net profit at RM75.1 million, up 53 per cent year-on-year (y-o-y) and one per cent quarter-on-quarter (q-o-q), bringing its FY21 CNP to an all-time high of RM271.8 million (up 78 per cent y-o-y) and generally exceeding expectations.
“Having strategically positioned the company to be automotive centric, the group is poised for the upcoming wave of tremendous growth as chip demand in the automotive space is only going to increase from here on.
“From our channel check, many automotive IDMs are securing wafer supply for up to two years with a non-cancellation clause. This will eventually trickle down to the OSAT space and MPI will be ready to take on more packaging jobs,” the research team opined.
It also saw that MPI’s management continues to exhibit topnotch execution with record breaking results amidst the sporadic relaxation or tightening of movement control and lockdown.
“We believe the group is capable of continuing the growth trend entering into FY22 as demand for chips remains strong around the world.
“The group continues to experience high demand for its power management chip packaging service as data centres are starting to see the need for expansion due higher bandwidth usage among consumers working from home.
“Demand for bandwidth will only increase further with the adoption of 5G,” it added.
On its recently released financial results, Kenanga Research noted that on a quarterly basis, despite being limited to 60 per cent workforce during the MCO 3.0 period, MPI managed to extend its record breaking streak to mark its sixth consecutive q-o-q growth as 4QFY21 CNP inched one per cent higher to RM75.1 million.
As a result, revenue edged two per cent higher to RM537.3 million on well-managed workforce deployment.
On a y-o-y basis, 4QFY21 CNP soared 53 per cent while revenue climbed 33 per cent on robust demand from Asia (up 25 per cent), US (up 30 per cent) and Europe (up 60 per cent).
“Cumulatively, FY21 CNP rose 78 per cent to an all-time high of RM271.8 million on 27 per cent increase in revenue to RM1,988.5 million, driving higher utilisation rates in both its Ipoh and Suzhou plants which benefited from the group’s healthy product mix,” it said.
Operationally, it noted that the group’s effort to streamline its workflow and reduce cost continued to show positive results as EBIT margin increased 4.4ppt to 17.9 per cent while net profit margin climbed 3.9ppt higher to 13.7 per cent.