The research house, which reiterated its "buy" call on the stock, raised its FY20-22 forecast earnings 39% to 48%, and increased its target price to RM5.50.
"Trading at only 20x FY21F P/E, we believe the huge discount to the other OSATs players (>30x P/E) is bound to narrow on renewed optimism in earnings visibility and growth outlook as well as continued strong results in the coming quarters," it said.
However, it added that the short-term share price may be capped by the overhand from a potential share placement as management works to comply with the public shareholding spread requirement in the next few months.
Unisem's 9M20 core earnings of RM89.3mil were 62.3% higher year-on-year and beat RHB's and consensus estimate at 91.6% and 92.1% of full-year estimate.
RHB expects solid earnings visibility from sustained robust orders from smartphones, communications, and industrial and data centre-related products on top of recovery signs from the automotive segment.
Besides new projects on multi-chip modules, radio frequency (RF) switch and power devices for 5G smartphones and tablets are expected to drive growth prospects, it said.
In addition, Unisem is accelerating the Phase 3 expansion of its Chengdu plant to be ready by end-FY22 to cater for sustained strong demand in China.
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