"Despite seasonality impact from the Chinese New Year holidays in Feb, the group is on track to record yet another solid quarterly earnings for 3QFY21," it said in a note.
The research house added that the group will also benefit from packaging demand for base station radio frequency components due to the push for 5G infrastructure in many countries.
Meanwhile, demand for power chip packaging also continues to rise on the back of data centre expansion and increased demand for consumer end-point devices as a result of expanded web computing activities.
"In addition to being well prepared and avoiding lockdowns throughout the entire pandemic, the group has also been well prepared in managing its supplies.
"As a result, MPI is not impacted by the chip shortage issue and has sufficient supply for the year," said Kenanga.
Moving forward, the group is expanding its Suzhou plant by another 50,000 sq ft at end April to take on more orders from Chinese customers.
The comes after the recent expansion of its Suzhou plant in October 2020.
Kenanga noted that the group is also looking for a new plant in China in anticipation of rising demand as a result fo the "Made in hina 2025" policy, while expansion for Ipoh plants is also in the pipeline give the high utilisation rates.
Kenanga raised FY21 and FY22 earnings by 9% and 11% to RM239.6mil and RM271.1mil to reflect higher order demand from key customers.
It maintained "outperform" with a higher target price of RM47 from RM43 previously, based on 35x 2021 forecast price-earnings.