KUALA LUMPUR (Feb 17): Malaysian Pacific Industries Bhd (MPI) fell by as much as 8.77% in Friday (Feb 17) morning trade on Bursa Malaysia, after reporting that its net profit for the second quarter ended Dec 31, 2022 (2QFY2023) plummeted by 78.5%.
At 10.20am, the stock shed RM2.96 to settle at RM30.78 a share, giving it a market capitalisation of RM6.46 billion.
On Thursday, MPI reported that its net profit fell to RM18.33 million from RM85.32 million a year ago, weighed by lower demand in the consumer electronics market.
Earnings per share slumped to 9.22 sen for 2QFY2023, from 43 sen for 2QFY2022, while revenue dropped 13.42% to RM526.42 million from RM608 million previously.
No dividends were declared for the quarter.
The weaker quarterly performance resulted in a 57.47% contraction in net profit for the first six months of FY2023 to RM71.03 million, from RM167 million a year ago. Revenue was down 8.56% to RM1.09 billion, from RM1.19 billion.
The outsourced semiconductor assembly and test firm warned that the challenging operating environment it is under will persist in the coming quarters, especially for its China operations, due to the overall weak demand in China and current geopolitical tensions.
"However, the board expects demand in China to improve as it enters the endemic phase [of Covid-19]. Thus, the group will continue to focus on its business strategies and operational efficiencies to ensure sustainability, and strengthen its fundamentals in conducting business," it said.
Meanwhile, CGS-CIMB Research downgraded MPI to “reduce” at RM33.74, with a lower target price of RM24 from RM27, and said MPI’s core net profit for the first six months of FY2023 was below expectations at 34% of its estimate and 38% of the Bloomberg consensus for the year, due to lower-than-expected utilisation of its Carsem Suzhou plant in China during the quarter under review.
