MITECH is structured around three divisions: (i) SEBU, which designs and manufactures semiconductor assembly and testing equipment; (ii) SMBU, which produces solder spheres via Accurus; and (iii) SSBU, which aims to develop new semiconductor solutions.
We project MITECH’s FY25–27F earnings to grow at a c.25% CAGR, driven by stronger SEBU revenue from higher shipment volumes and ASPs, alongside improving contributions from Accurus on rising solder ball demand and the turnaround of Accurus China.
We initiate coverage on MITECH with a BUY rating and a TP of RM4.00, based on 30.5x FY26F EPS of 13.1 sen. We like MITECH for its: (i) steady earnings growth trajectory, (ii) favourable positioning in directly serving Tier-1 OSATs, foundries and IDMs, and (iii) undemanding valuation of 21x FY26F P/E relative to ATE peers in Malaysia.
Key Investment Highlights
Leadership in WLCSP sorting drives sustained share gains. Mi Series WLCSP die-sorting platform boasts a proprietary horizontal turret system that achieves better performance than conventional rotary pick-and-place technology. Its latest flagship, the MiND.X (AI)-enabled Mi Quantum and Quantum Plus, is capable of delivering industry-leading throughput of >50k UPH, further strengthening the Mi Series’ positioning among tier-1 OSAT and IDM customers. We estimate the Mi Quantum family carries an ASP roughly double that of the legacy Mi20 model. Its Mi Series commands over one-third of market share globally and is expected to drive further share gains and underpin SEBU’s performance.
Si Series and Ai Series may unlock the next leg of growth for SEBU. Management anticipates rising adoption of the new SiC-based KGD test handler in 2026, alongside stronger demand for silicon-based KGD testers, reflecting the higher testing intensity required for advanced chip stacking and packaging. We estimate its unit shipment to grow from 10 units in FY25F to 14/16 in FY26/FY27F. Additionally, we view that its Ai Series could mark a breakthrough for SEBU in the HPC/memory space with its LAB (Ai5) and LCB (Ai20), which are targeted for customer adoption in 2027. If successfully commercialised, we believe Ai Series would elevate MITECH’s positioning in the advanced packaging domain.
Accurus tapping on advanced packaging boom. Accurus is among the largest solder ball manufacturers in Taiwan and has been gaining market share, supported by an increasing preference among major foundries and OSAT players for locally based suppliers. Beyond tier-1 OSATs, Taiwan’s leading foundry is also expanding its advanced packaging capacity to meet surging CoWoS demand, which is in turn lifting demand for solder balls. Although Accurus China is currently reporting minor losses (RM3.9m in 9MFY25) due to underutilisation (c.50%) for its Ningbo facility. MITECH targets breakeven by 4Q25, with profitability expected in 2026 as utilisation ramps up alongside accelerating demand for solder balls to support China’s growing advanced packaging requirements, particularly for AI applications.
Undemanding valuation relative to ATE peers. MITECH is trading at an undemanding valuation of 21x our forecasted FY26F earnings, a discount to its ATE peers valued at an average of c.32x. We opine that the valuation gap reflects MITECH’s shorter track record on Bursa Malaysia, having listed only in 2018 compared with peers like ViTrox (43x of FY26F EPS), Pentamaster (32x FY26F EPS). We see scope for MITECH to rerate and narrow the valuation gap, supported by: (i) steady earnings growth driven by both SEBU and SMBU; and (ii) its growing capability to serve leading foundries and Tier-1 OSATs through its equipment offerings and solder ball supply.
We initiate coverage on MITECH with a BUY rating and a target price of RM4.00, based on 30.5x FY26F EPS of 13.1 sen. We like MITECH for its: (i) steady earnings growth trajectory (3-year CAGR of 25% over FY25-27F), (ii) favourable positioning in directly serving Tier-1 OSATs, foundries and IDMs, as well as (iii) undemanding valuation of 21x FY26F P/E relative to ATE peers in Malaysia.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.032101 | 4.062451 |
| EUR | 4.771456 | 4.778746 |
| CNY | 0.577351 | 0.578254 |
| HKD | 0.518501 | 0.522419 |
| SGD | 3.141818 | 3.165924 |