UNISEM (5005) UNISEM (M) BHD
KUALA LUMPUR (Oct 31): Hong Leong IB Research (HLIB) has maintained its Buy rating on Unisem (M) Bhd with a higher target price of RM2.02 (from RM165) and said the company’s 9M14 core net profit of RM38.3 million surpassed house and street’s full year forecasts by 31% and 29%, respectively if annualised.
In a note Friday, the reearch house said Unisem had declared a tax exempt interim dividend of 4% or 2 sen per share (3Q13: none) with an ex-date on 13th Nov.
It said the solid 3Q14 earnings were chiefly due to strong demand of new smartphone launches as well as proliferation of 4G technology in China.
HLIB said that although demand momentum extended into Oct and Nov, Unisem expect sales to be flat to minus 5% q-o-q in 4Q14 to be cautious on Dec in view of year-end inventory adjustments.
“Overall utilisation rate improved to 70% although wlCSP / flip-ship product lines were running at more than 80%.
“Reiterate Buy after raising our fair value by 22.4% from RM1.65 to RM2.02 reflecting the upward earnings revision,” it said.
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