Mi Technovation Berhad - Tremendous closing for FY25
Thu, 26-Feb-2026 08:49 am
by Brian Chin Haoyan • Apex Research

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MI (5286)

Target Price (RM)

4.20

Recommendation

Buy

  • MITECH reported 4Q25 core net profit of RM27.4m (-25% QoQ, 4.3x YoY), which brought FY25’s sum to RM115.1m (+65% YoY). The results came in above our (113%) and consensus (114%) estimates due to stronger-than-expected contribution from SMBU. 

  • We expect SEBU’s sales momentum to extend into FY26, driven by expanding WLCSP/WLP adoption, while a turnaround at Accurus China and improving demand at Accurus Taiwan should underpin steady earnings growth despite the ongoing appreciation of the MYR against the greenback.

  • Increase our FY26F forecast by 4.5%, while keeping FY27F earnings broadly unchanged. Maintain BUY rating with a higher TP of RM4.20 (from RM4.00), based on an unchanged PE of 30.5x FY26F EPS of 13.8 sen.

 

Above estimates. MITECH reported 4Q25 core net profit of RM27.4m (-25% QoQ, 4.3x YoY), which brought FY25’s sum to RM115.1m (+65% YoY). The results came in above our (113%) and consensus (114%) estimates due to stronger-than-expected contribution from SMBU. 4QFY25 results were arrived after adjusting for fair value gain on investment properties (-RM7.5m), impairment loss on associate investment (RM6.5m) and forex loss (RM3.7m).

 

QoQ. Core earnings declined 25% mainly attributed to seasonally lower billings for Mi Series die sorter, which dragged SEBU’s revenue (-50%) and PBT (-32%) contribution following a strong peak period in 3Q25. However, its bottom line was cushioned by increased PBT contribution from SMBU (+25%) likely driven by production ramp at Accurus China and robust solder ball demand for AI-related packaging applications.

 

YoY/YTD. Core net profit surged (4.3x YoY, +67% YTD) thanks to stellar revenue growth from both SEBU (+20% YoY, +40% YTD; higher unit sale and ASP of advanced Mi Series WLCSP die sorter, which is gaining market share amidst rising demand for advanced packaging solutions) and SMBU (+55% YoY, +31% YTD; robust advanced packaging demand boosting solder ball sales, coupled with increasing plant utilisation rate at Accurus China through 2026).

 

Outlook. We expect the positive momentum for equipment sales to continue in FY26, backed by the continued market expansion of WLCSP advanced packaging platform amidst rising WLCSP/WLP content per device as smaller sized packages are increasingly required to support a broader range of applications (i.e. robotics, smart glasses, earbuds). Management is unfazed by concerns over a potential slowdown in smartphone shipments amid surging memory prices. Meanwhile, Accurus China is poised to turnaround in FY26 with utilisation rates projected to exceed 60%, based on our estimates, while Accurus Taiwan should see steady improvement in FY26, driven by outsized solder sphere demand for advanced packaging lines serving domestic foundries and tier-1 OSATs. As such, we continue to see strong potential for Mi to deliver decent earnings growth in FY26F despite ongoing appreciation of MYR versus the USD.

 

Forecast. We increase our FY26F forecast by 4.5% as we impute slightly higher utilisation and margin assumptions for SMBU, while keeping our FY27F earnings broadly unchanged.

 

Valuation. We reiterate BUY rating with a higher target price of RM4.20 (from RM4.00), based on an unchanged PE of 30.5x FY26F EPS of 13.8 sen. We like MITECH for its: (i) steady earnings growth trajectory, (ii) favourable positioning of directly serving Tier-1 OSATs, foundries and IDMs, as well as (iii) undemanding valuation of 22x FY26F P/E relative to ATE peers in Malaysia.

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