CIMB IB Research keeps Hold on MPI, lowers target to RM7.30

CIMB IB Research keeps Hold on MPI, lowers target to RM7.30
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KUALA LUMPUR (April 28): CIMB IB Research has maintained its “Hold” rating on Malaysian Pacific Industries Bhd (MPI) at RM7.32 with a lower target price of RM7.30 (from RM8.50) and said MPI’s 9MFY16 core net profit was in line at 79% of house and 73% of consensus forecasts.

In a note yesterday, the research house said MPI’s 3QFY16 EPS rose 33% y-o-y and 14% q-o-q due to improving product mix in favour of the higher margin packages, and favourable currency movements.

“We maintain a cautious outlook on demand recovery due to the lack of near-term catalysts given the lengthening of the smartphone replacement cycle.

“Management is cautiously optimistic of a sequential revenue growth of 5% in 4QFY16 driven by the seasonal pick-up in industry demand.

“Maintain Hold with a lower target price. Switch to Inari Amertron Bhd for better tech exposure,” it said.