PETALING JAYA: Analysts are turning more bullish on Malaysian Pacific Industries
Bhd (MPI), betting that the semiconductor group is well positioned to ride the current artificial intelligence (AI)-driven chip upcycle despite lingering margin pressures from its Thailand expansion.
RHB Research reiterated its “buy” call on MPI and raised its target price to RM43.80 a share from RM35, saying earnings momentum remained intact amid rising utilisation rates, stronger customer loadings and expansion into higher-value technology segments.
“Earnings momentum remains intact, with rising utilisation, scale benefits, new technology pivot and expansion plans amid the current semiconductor upcycle, which outweigh the marginal losses/lower margin from its new Thailand subsidiary,” it said.
MPI’s core profit after tax and minority interests for the nine months of financial year 2026 (FY26) rose 32.6% year-on-year (y-o-y) to RM154.4mil, broadly within expectations, as revenue climbed 22.1% to RM1.91bil on stronger demand across key markets.
Orders surged 54% y-o-y, driven mainly by AI server and peripherals demand.
The group also declared a second interim dividend of 30 sen per share, compared with 25 sen a year earlier.
RHB Research, however, noted that near-term margin weakness stemming from higher production costs, foreign-exchange headwinds and losses from the newly acquired Thailand operations was manageable within the broader growth trajectory.
The Thailand unit, consolidated since February 2026, is currently generating annual revenue of around US$50mil to US$60mil.
However, MPI is targeting over US$200mil in revenue contribution from the facility by 2030 following its expansion plans into AI, robotics, power and defence-related applications.
The research house expects MPI’s Malaysia and China operations to reach optimal utilisation by the second half of calendar year 2026, supported by stronger consumer, server and sensor-related package demand.
It also highlighted the gradual ramp-up of MPI’s Suxiang factory, which is currently undergoing qualification and certification and is expected to contribute meaningfully from FY27 onwards.
Similarly, an analyst told StarBiz that looking ahead, MPI is poised to ride the ongoing global semiconductor upcycle, with the group sharpening its focus on higher-margin segments such as AI servers and sensors.
At the same time, the recent acquisition of Carsem Semiconductor (Bangkok) is expected to widen its exposure into new memory-related products, particularly those tied to automotive applications.
Meanwhile, TA Research said MPI would continue focusing on capturing higher-margin business segments, particularly in AI servers and sensors, while optimising its Thailand plant to broaden its product mix and unlock new revenue streams.
On a quarterly basis, MPI’s third quarter of FY26 core profit declined 34% quarter-on-quarter to RM41.4mil despite revenue rising 4% to RM651.6mil, mainly due to higher production costs and margin compression.
Nevertheless, the research house noted that the stronger revenue performance was driven by improved contributions from Asia and the US markets.
MPI also maintained a robust balance sheet, ending the quarter with a net cash position of RM738.2mil.
However, the research house has put its call “under review”, pending an analyst briefing later, with an unchanged target price of RM32 per share.
