Friday 29 Mar 2024
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KUALA LUMPUR (Aug 4): CIMB IB Research has upgraded Unisem (M) Bhd to “Add” at RM3.82 with a higher target price of RM% (from RM3.40) and said it was turning positive on Unisem’s earnings growth prospects for 2H due to stronger industry demand outlook and its strategic shift towards advanced packaging portfolio.

In a note Aug 3, the research house said Unisem plans to increase its capex in FY17F in order to raise its wafer bumping capacity in Chengdu and invest in new equipment for higher level of automation.

“We raise our FY17-19F EPS by 11-33% to account for higher utilisation rate on the back of capacity expansion and better product mix (higher-margin packages).

“We upgrade Unisem to Add with a higher TP of RM5.00, based on 15x CY18F P/E.

“Earnings outperformance (vs. consensus estimates) and higher dividend payout are potential re-rating catalysts for the stock,” it said.

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