Bullish outlook for MiTB on rising demand

PETALING JAYA: Apex Securities Research has reaffirmed its bullish stance on Mi Technovation Bhd (MiTB), citing strengthening demand across its semiconductor businesses.

The research house has also cited improving pricing power and the potential value-unlocking catalyst from the proposed Singapore listing of MiTB’s semiconductor materials arm.

The research house reiterated its “buy” call while raising its target price to RM6.38 from RM6.23 after lifting earnings forecasts for the financial years ending 2026 to 2028 (FY26 to FY28) by about 2%.

“We remain bullish on MiTB’s earnings trajectory over the medium to long term, driven by the company’s semiconductor material business unit (SMBU) demand to strengthen further into the second half of financial year 2026 (2H26) versus 1H26.

“Also, the semiconductor equipment business unit’s (Sebu) momentum is expected to sustain on mobility and wearables and high performance computing (HPC) and memory demand; together with the proposed Singapore Exchange (SGX) listing of Mi Material.

“The listing remains on track for completion by the fourth quarter of this financial year,” the brokerage said.

Apex Research expects the company’s SMBU to remain the key growth engine, supported by stronger revenue contributions, firmer average selling prices and sustained pricing power.

MiTB delivered a record second-quarter core net profit of RM52.5mil, up 62.2% year-on-year and 72.2% quarter-on-quarter, lifting first-half core earnings to RM82.9mil, an increase of 61.8% from a year earlier.

Excluding unrealised foreign-exchange movements, core net profit reached RM55.2mil, with the results exceeding both Apex Research’s and consensus expectations after accounting for more than 60% of full-year forecasts.

Quarterly revenue climbed 46.7% year-on-year to RM226mil.

This was driven largely by the SMBU division, whose sales doubled to RM131.3mil on robust solder ball demand.

Meanwhile, the Sebu business posted a steadier 6.2% increase in revenue to RM93.9mil.

Looking ahead, management expects momentum to continue into the second half of FY26.

Demand for Sebu is expected to remain underpinned by mobility and wearables as well as HPC and memory applications, while SMBU is poised to benefit from stronger HPC and memory demand, cyclical recovery in mobility and wearables and a gradual rebound in automotive and renewable energy markets.

The group’s silicon carbide business is also progressing towards commercial production in the first quarter of 2027, while its electric vehicle powertrain venture is ramping up operations.

On the proposed listing of Mi Material Holding on SGX, Apex Research believes the exercise could enhance the visibility of the fast-growing materials business.

The research house said it could also potentially improve financial flexibility and most likely unlock shareholder value.

However, it noted that investor focus will remain on the final initial public offering valuation, pricing and offering structure.

However, the immediate financial impact should be limited as MiTB is expected to retain a 72.6% controlling stake and continue consolidating the unit’s financial results.