KUALA LUMPUR: Mi Technovation Bhd's first quarter ended March 31, 2024 (1Q24) core earnings were in line with Public Investment Bank Bhd (PublicInvest) and consensus full-year expectations, making up 22.6 per cent and 23.4 per cent respectively.
The company saw its 1Q24 core earnings surge 117.5 per cent year-on-year (YoY) to RM17.4 million, excluding the impact of foreign exchange (FX) gain (RM10.5 million) and losses from minority interest in 90 per cent-owned Mi Equipment Korea (RM0.4 million).
"Losses from the Korean operations shrank substantially. We believe MI Technovation has successfully delivered the first laser assisted bonding equipment.
"Nevertheless, we lower financial year 2024 to 2026 forecasts (FY24-26) earnings by seven to nine per cent after imputing a more conservative stance on equipment deliveries," it said in a note today.
As such, PublicInvest maintained an "Outperform" call on Mi Technovation with a new target price of RM2.67.
Meanwhile, the company's operating profit margin expanded from 14 per cent to 20.8 per cent due to higher capacity utilisation.
PublicInvest noted that the company incurred a small start-up cost of RM0.3 million for the new business unit, Semiconductor Solutions Business Unit (SSBU), which is involved in high power modules and devices for wide band-gap applications in automotive and renewable energy segment in Hangzhou, China.
Mi Technovation's 1QFY24 revenue jumped 40 per cent YoY, mainly due to stronger sales from both Semiconductor
Equipment Business Unit (SEBU) and Semiconductor Material Business
Unit (SMBU) segments.
PublicInvest noted that SEBU sales surged 56.8 per cent to RM61.3 million, likely due to robust orders for the Mi Series in Malaysia and more deliveries of Si Series equipment in China for the 30.75 per cent-owned Talentek Microelectronics (Hefei), which is an outsourced semiconductor assembly and test player for the smartphone industry.
On the other hand, SMBU sales grew 21.5 per cent YoY to RM45.8 million driven by on increased sales in solder ball from both Accurus Taiwan and Accurus China.
PublicInvest also highlighted that the company is sitting on a net cash position of RM386.9 million as of 1Q24.
It plans to invest a total of US$30 million (RM142.8 million) into a research, development and manufacturing facility for power modules and devices in Xiaoshan, Hanzhou City, China with the Xiaoshan Economic and Technological Development Zone Administration Committee.
This is to tap into the opportunity on
wide bandgap applications market in the automotive and renewable energy segment under the SSBU.
Mi Technovation had also acquired an additional 5.21 per cent stake in Talentek Microelectronics (Hefei) Ltd for 27 million yuan (RM17.8 million), raising its holdings to 30.75 per cent