PETALING JAYA: Analysts expect Malaysian Pacific Industries
Bhd’s (MPI) earnings growth to accelerate through the financial year (FY27), with a more meaningful improvement in profitability anticipated by fourth quarter of FY27 (4Q27), while the group continues to position itself for the next wave of growth.
For Kenanga Research, MPI’s FY27 outlook remains supported by broad-based demand, led by artificial intelligence (AI) servers, while earnings recovery will depend on the ramp-up of recently installed capacity.
The management expects the new AI-related equipment to begin contributing from October, with a more meaningful profitability improvement by the fourth quarter of FY27, it said in a recent report.
Furthermore, longer-term growth should be supported by advanced packaging, power-related applications and humanoid robotics, although manpower shortages and elevated input costs remain key execution risks.
Despite FY26 capital expenditure (capex) of RM573mil, Kenanga Research noted that MPI retains a healthy RM531mil net cash position and expects FY27 capex to moderate.
Management expects FY27 capex to be lower given the absence of major new expansion, which should support stronger free cash flow as earnings ramp.
MPI is also actively seeking acquisition opportunities in Europe and Mexico/United States, particularly in advanced packaging, power modules, automation and related technologies.
The research house has a “market perform” call on the stock and kept its FY27 net profit forecast of RM267mil with a target price of RM43.70 per share.
In a recent report, TA Research said despite cost headwinds from higher raw material prices, MPI still delivered a solid FY26 performance, supported by healthy growth in higher-margin AI server packaging.
MPI management also guided that demand visibility remains strong across all segments supported by a growing backlog, accelerating bookings and increasing design wins from key customers.
Therefore, earnings growth is expected to strengthen progressively through FY27, with a more meaningful step-up in profitability anticipated by 4Q27 as recently installed capacity moves towards higher utilisation, TA Research said.
“We take this opportunity to raise MPI’s target price-to-earnings multiple from 30 times to 32 times, reflecting the group’s robust business outlook and increasing exposure to the ongoing AI-driven semiconductor upcycle.”
Consequently, it raised the stock’s target price to RM47.30 from RM44 and upgraded its recommendation to a “hold” from “sell” previously.
In a note to clients, CIMB Research said: “We expect the new power module programme to start contributing in October 2026, lifting AI-related revenue beyond RM500mil and driving MPI’s next growth phase in FY27 to FY28.”
Furthermore, new US customers and product diversification should enrich MPI’s sales mix, lift margins at Carter Semiconductor Bangkok Ltd, and accelerate the path to profitability for China-based Carsem Suxiang.
The group is also sampling power modules, sensors, and memory packages for humanoid applications, which it sees as an attractive growth opportunity over the next five years.
In addition, MPI is exploring investments in panel-level packaging as part of its product roadmap to strengthen its advanced-packaging capabilities.
Meanwhile, an analyst with a bank-backed brokerage highlighted that MPI’s share price fell 9% over the past week, partly due to weaker sentiment toward the technology sector and concerns over near-term margin pressure.
Nevertheless, he believes that MPI’s investments in new packaging technologies and processes will strengthen its competitiveness.
Therefore, he viewed the recent weakness as an attractive entry point despite near-term margin pressures.
