Tuesday, January 30, 2018

MPI: Earnings Pulled Back


Result Update

For QE31/12/2017, MPI's net profit rose 14% q-o-q but dropped 25% y-o-y to RM41 million while revenue rose 2% q-o-q but dropped 2% y-o-y to RM395 million. PBT rose q-o-q due to higher overall revenue which rose due to 12%-increase in the revenue from the Europe segment which more than offset the 5%-decline in revenue from the America segment while revenue from the Asian segment was flattish.


Table: MPI's last 8 quarterly results


Graph: MPI's last 44 quarterly results 

Valuation

MPI (closed at RM11.24 yesterday) is now trading at a trailing PER of 13.4 times (based on last 4 quarters' EPS of 85 sen). At this PER, MPI is deemed fairly valued. Its dividend yield is also decent at 2.6%.

Technical Outlook

MPI is in a long-term uptrend line, SS. However the share price has moved way above the uptrend line and appears to have formed a rounding top. If MPI breaks below RM10.70, it may slide to the psychological support of RM10.00; the next horizontal line at RM9.30 or the long-term uptrend line at RM8.70.


Chart: MPI's weekly chart as at Jan 29, 2018 (Source: Malaysiastock.biz)  

Conclusion

Albeit the weaker financial performance, MPI remains a good stock for long-term investment. As long as earnings uptrend remains intact - due to strong demand for semiconductor - MPI remains a HOLD. It can be a buying opportunity if share price were to drop to RM10.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

1 comment:

Tay Sz said...

Dear Mr Lu,

Wondering which stock is related to A. I. Theme in the KLSE?

Please share you opinions with us.

Thank you.

Best Regards
Tay SZ