KUALA LUMPUR: Unisem (M) Bhd
’s latest financial results have come in slightly ahead of CIMB Research’s expectations.
The research house said Unisem’s 1Q17’s core net profit was “slightly ahead” of the house and consensus expectations at 28% and 27% respectively of FY17 forecasts due to higher-than expected utilisation and average selling price (ASP).
“1Q17 core net profit was slightly ahead of our /consensus expectations at 28%/27% of FY17 forecasts due to higher-than-expected utilisation and average selling price,” CIMB said.
The research house said Unisem’s core net profit in 1Q17 rose 33% year-on-year due to higher utilisation and ASP from forex movements, but fell 11% quarter-on-quarter due to the strengthening of the ringgit against US dollar.
“Management is guiding for 5% sequential revenue growth in 2Q17, driven by robust sales momentum in 1Q17 and new business for the wafer-bumping and WLCSP lines in Chengdu, China.
“This is on the back of new design wins for newer smartphone models that are scheduled for launch in 2H17,” CIMB said.
It added that Unisem spent RM71.2mil capex in 1Q17 (RM48.9mil in 1Q16) to buy new equipment such as flip-chip bonders, bumping and wafer level equipment and test probers to support the new business in China.
CIMB has raised its FY17-19F earnings per share by 4-9% to account for higher utilisation, driven by growing demand from A&I and favourable forex movements.
“We maintain our ‘hold’ rating on the stock with a higher RM3.40 target price, based on a
higher 14x CY18 P/E, in line with the sector mean in view of an improving industry demand outlook.
“Potential catalysts are a higher dividend payout and stronger earnings from A&I, while downside risks are lower payout and weaker earnings from the communication segment,” CIMB said.
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