RHB Research has maintained a “BUY” recommendation for Malaysian Pacific Industries Bhd with a higher TP. Following the earnings revision, its TP is raised to MYR 53.34, pegged to unchanged 32x CY22 P/E (+3SD from its 3-year mean), inclusive of a 2% ESG premium, based on our in-house proprietary methodology.
RHB still sees upside for MPI’s growth prospects with additional capacity coming on stream, given the automotive sector’s strong recovery and China’s localisation efforts.
It said that on track for another record year, it expects resilient demand for OSATs – amid shortages in chips and production bottlenecks – to continue to be a boon for MPI. We believe the additional capacity (+15%) in the Suzhou facility, since Aug 2021, to continue to drive growth moving forward.
It said that the group is also currently adding 70k sqft (+16%) in M Site, Ipoh to cater to increasing demand. Long term technology drivers such as RF, power module (eg. SiC, GaN), and electrification in the automotive industry should continue to catalyse medium-term prospects.
