KUALA LUMPUR (Sept 19): Malaysian Pacific Industries Bhd (KL:MPI) closed at a more than one-year high on Friday after analysts raised their 12-month target price to RM35 following its bid to acquire Infineon’s back-end plant in Thailand.
MPI announced on Thursday that it hopes to complete the deal to buy Infineon Technologies (Thailand) Ltd (IFTH) for US$77.95 million (RM327.56 million) by the fourth quarter of 2026.
CIMB Securities in a note said funding the deal will not be a problem for MPI given its RM988 million net cash and proceeds from the sale of two land parcels in Bayan Lepas earlier this year.
The acquisition is expected to contribute 8% to 12% of revenue in the financial year ending June 30, 2027 (FY2027) and FY2028, boosting the three-year compound annual growth rate to 24% for FY2025-FY2028 core net profit.
The research house raised its target price to RM35, factoring in earnings growth from IFTH, artificial intelligence data centres, and automotive market recovery.
The new valuation is based on a 25.3 times price-earnings ratio (PER) for end-FY2026.
Calling the deal a good buy as it’s priced below the company's book value, CIMB Securities said the deal strengthens MPI’s partnership with Infineon, diversifies its footprint into Thailand and opens scope for margin improvements at IFTH.
Meanwhile, RHB Investment in its note kept its financial forecasts unchanged for now, but raised its target price for the company to RM35, based on expected earnings for FY2026.
It said that while the PER may look high, the acquisition still makes sense because:
- the price-to-book ratio is low at 0.7 times,
- building a new facility would take longer and cost more, and
- the industry is expected to rebound, which should lift future earnings.
The firm believes the deal opens the door for tech sharing and cost savings.
“Despite the terrific share price run in recent months, we still like the stock for a stronger FY2026 performance, technology road map, and strong foothold in high-growth segments,” RHB said.
The stock rose to a high of RM29.80 before closing 2.03% higher at RM29.12 — its highest in over a year — giving MPI a market value of RM6.11 billion. It was the top gainer for the day, with 947,600 shares traded.
Only two research houses have a 'buy' call on the stock, both with target prices above the 12-month consensus of RM25.73. Three firms rate it 'hold', and another three have a 'sell' call.