RHB Upgrades UNISEM to Buy After Tech Sell-Off, Backs Malaysian Operations Turnaround
StockTipRatings ·
RHB Investment Bank analyst Lee Meng Horng upgraded Unisem (M) to “Buy” from “Neutral”, with a RM4.60 target price, implying approximately 23% upside. Following the technology-sector sell-off, he considers its valuation attractive at approximately 25 times projected 2027 earnings.
The company's 9M26 core net profit doubled to RM53.9 million, missing his expectations but meeting consensus estimates as losses at the Malaysian operations persisted. However, Lee expects the Malaysian operations to break even in 4Q26 and return to profitability in 2027, supported by higher utilisation, improved selling prices and cost savings following the completion of relocation activities.
Chengdu’s optimally utilised factory and Phase 3 expansion provide further growth support, while Gopeng’s installed capacity offers room to accommodate additional demand. However, wafer shortages continue to constrain growth, including the ramp-up of certain new power packages.
He forecasts recurring net profit to rise from approximately RM97 million in 2026 to RM257 million in 2027, underpinning his positive view despite the near-term earnings shortfall.
As of 9:11 a.m. on November 10, Unisem (M)’s share price rose 1.1% to RM3.74.
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The call: RHB on UNISEM (M) BERHAD
- Rating
- Buy
- Target price
- RM 4.60
- Upside from current
- 27.4%
Lee Meng Horng's 12-month track record
No.9 of 20 analysts at RHB
- Success rate
- 43%
- Average return
- 3%
- Stocks covered
- 26
Consensus target price for UNISEM
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