PETALING JAYA: Malaysian Pacific Industries
Bhd (MPI) is expected to remain a beneficiary of the global semiconductor upcycle, with growth increasingly driven by higher-margin applications such as artificial intelligence (AI) servers and sensors, although rising production costs could constrain near-term earnings, analysts say.
RHB Research retained its “buy” call on MPI and raised its target price to RM55.80 from RM50.70.
It said: “Higher utilisation and operating leverage should support earnings growth, while management’s strategic pivot towards higher-margin segments such as AI servers and sensors, alongside opportunities in humanoids and Wide Bandgap (WBG) semiconductors – underpin a bullish FY27-FY28 outlook.”
Kenanga Research, however, maintained its “market perform” recommendation and RM43.70 target price, pointing to cost pressures despite MPI’s exposure to structural semiconductor growth.
The differing views came after MPI reported a 24.3% year-on-year (y-o-y) increase in revenue to a record RM2.65bil for FY26, while core profit after tax and minority interest (Patami) rose 22.4% to RM203.2mil.
RHB Research said the results were broadly in line with expectations, with core Patami accounting for 97.3% of its full-year estimate.
Growth was broad-based, with revenue from Asia, Europe and the United States rising 23%, 10% and 52%, respectively, helped by resilient semiconductor demand, recovering automotive activity and sustained demand for power modules used in server applications.
Kenanga Research was more cautious, noting that MPI’s FY26 net profit of RM188mil represented only 91% of both its estimate and consensus forecast, mainly because production costs in the fourth quarter were higher than expected.
Gross profit margin narrowed to 9.4% in the quarter from 10.6% previously, due largely to higher input costs.
“Management had previously highlighted rising gold and copper prices, alongside higher logistics and electricity costs, particularly at Carsem Malaysia,” the research outfit said.
For FY27, RHB Research expects the industrial segment, MPI’s largest business, to lead growth as AI servers account for about 13% of its business and automotive-related packages recover.
It also sees longer-term opportunities from the adoption of silicon carbide and gallium nitride in power packaging, as well as emerging applications involving sensors, memory, humanoid robots and autonomous vehicles.
The research house expects MPI’s Suxiang plant in China to ramp up progressively and contribute meaningfully from FY27.
It raised its FY27 and FY28 earnings forecasts by 1.4% and 5.4%, respectively, and lifted its valuation multiple to 35 times price-to-earnings from 33 times previously.
Kenanga Research, meanwhile, said MPI was likely to continue benefiting from the semiconductor upcycle while focusing on higher-margin AI server and sensor opportunities, but would need to actively manage production costs amid macroeconomic and geopolitical uncertainties.
