Mi Equipment rebounds after opening below IPO price

KUALA LUMPUR:  Semiconductor-related company Mi Equipment Holdings Bhd made a steady debut on the Main Market of Bursa Malaysia on Wednesday amid the cautious global markets.

It opened at RM1.39, down three sen from its offer price of RM1.42. There were 2.45 million shares down.

However, it staged a rebound following the more positive Bursa Malaysia and key Asian markets.

At 9.07am, it was trading at RM1.46, up four sen with 19 million shares done.

The FBM KLCI was up 10.02 points or 0.58% to 1,725.38. Turnover was 93.26 million shares valued at RM65.97mil. There were 143 gainers, 90 losers and 170 counters unchanged.

Penang-based Mi Equipment manufactures wafer level chip scale packaging (WLCSP) sorting machines.

It is the first company to be listed on the Main Market of Bursa Malaysia Securities this year.

It raised up to RM190.87mil from the issuance of 134.428 million new shares under its floatation exercise.

UOB Kay Hian Malaysia Research said Mi Equipment is a regionally competitive manufacturer of the WLCSPsorting machines with tier-1 MNCs as its repeat clients. 

“This, coupled with the promising long-term prospects of the semiconductor industry, bodes well for Mi. However, its earnings are volatile in nature. 

“After a stellar 2017, the next earnings growth leg could come in 2019, on a five-fold increase in capacity,” it said. 

The research house said at 12 times 2017 price-to-earnings, Mi’s valuation is at a discount to local equipment players’ average PE of 21.3 times in 2017 and 20.6 times in 2018 and 17.6 times in 2019F.

Mi Equipment’s principal markets are Malaysia, South-East Asia (Singapore, Thailand and the Philippines), North-East Asia (Taiwan, China and South Korea) and North Atlantic (the United States, Mexico and Spain).

In general, the group derives the bulk of its revenue from international market, particularly North-East Asia. Last year, overseas customers accounted for about 83% of its revenue.

To note is the strong compounded annual growth rate (CAGR) of Mi Equipment’s revenue at 32.6% to RM173.3mil in 2017 from RM74.3mil in 2014.
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