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Research by CGS
Hold – TP of MYR 2.40

“1Q24: Decent start” 

Following its 68% appreciation over the past 12 months, Mi Tech’s current valuation of 23.9x CY24F P/E is already at a 25% premium over its pre-Covid mean of 19.1x. Given its subdued FY24-26F ROEs of 8-9% (FY18-20 average: 14.3%), further stock re-rating is unlikely, in our view. As such, we keep our Hold call, but with a higher GGM-derived TP of RM2.40 as we ascribe a higher sustainable ROIC of 13.7% to capture its sustained growth into FY25-26F. Overall, we lift FY24-25F EPS by 8-10% as we account for higher shipment volumes for its equipment business. Downside risks are weak equipment demand and slow ramp-up of its new venture semiconductor solutions business unit (SSBU). Upside risks: stronger-than-expected equipment and materials demand, and a breakthrough at SSBU.

Analyst(s):
Shafiq KADIR
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Dharmini THURAISINGAM
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$KLSE-MI 
Research by CGS
Hold – TP of MYR 2.40

“1Q24: Decent start” 

Following its 68% appreciation over the past 12 months, Mi Tech’s current valuation of 23.9x CY24F P/E is already at a 25% premium over its pre-Covid mean of 19.1x. Given its subdued FY24-26F ROEs of 8-9% (FY18-20 average: 14.3%), further stock re-rating is unlikely, in our view. As such, we keep our Hold call, but with a higher GGM-derived TP of RM2.40 as we ascribe a higher sustainable ROIC of 13.7% to capture its sustained growth into FY25-26F. Overall, we lift FY24-25F EPS by 8-10% as we account for higher shipment volumes for its equipment business. Downside risks are weak equipment demand and slow ramp-up of its new venture semiconductor solutions business unit (SSBU). Upside risks: stronger-than-expected equipment and materials demand, and a breakthrough at SSBU.

Analyst(s):
Shafiq KADIR
shafiq.abkadir@cgsi.com
Dharmini THURAISINGAM
dharmini@cgsi.com