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May 31, 2021

MPI ‘Led’ Bursa Malaysia

 Shares of Malaysian Pacific Industries Bhd (MPI) jumped RM1.60 or 4.3% to RM38.80 after the company once again recorded the highest quarterly earnings in the third quarter ended March 31, 2021 (3QFY21).

At 12.21pm, the counter hit RM38.74, up RM1.54 or 4.14%.

The counter was the most profitable counter in the local bourse trading session this morning.

Kenanga Research analyst Samuel Tan said MPI's net profit at 3QFY21 tripled year -on -year to RM74.4 million, exceeding his expectations while net profit for the first 9 months of 2021 (9MFY21) was RM196.7 million.

"We expect the company's revenue to remain strong to achieve the enhanced revenue projection for financial year 2021 (FY21), driven by higher chip packaging demand for data centers, laptops and 5G radio frequencies as factory utilization remains high," he explained. .

Tan raised MPI's net profit projection for FY21 and FY22, by RM253.1 million and RM286.3 million, respectively.

He also maintained the ‘outperform’ recommendation and updated his target price to RM47.50 from RM47 previously.

Meanwhile, BIMB Securities Research analyst Afifah Abdul Malek also reviewed MPI's earnings forecast for FY21 to FY23, which was between 26% and 32% after the company's 9MFY21 net profit exceeded expectations.

"We expect the sales contribution from the automotive, consumer/communications and industry sectors to remain strong in line with the increasing worldwide demand for electric vehicles (EVs), consumer electronics, data centers and more," he said.

He maintained a ‘buy’ rating for the company’s shares with a target price of RM45.

However, AmInvestment Bank Research analyst Dalilah Fairoz maintained a ‘hold’ rating on MPI with an unchanged target price of RM36.05.

"We continue to be interested in MPI but think that the company's shares are valued at the current share price," he said, adding that MPI's 3QFY21 earnings are still on par with its projections.