KUALA LUMPUR (March 3): Mi Technovation Bhd (KL:MI) had its best day in nearly six weeks as investors and analysts cheered a plan to list its semiconductor material business in Singapore.
The listing is expected to help unlock value of the business and generates fresh capital for the company that derives most of its revenue from manufacturing chip packaging sorting machines, analysts said.
“We view the proposed listing as a positive development as it is expected to enhance corporate visibility and establish a transparent valuation benchmark for the materials business,” said Berjaya Research.
Mi Technovation rose as much as 17 sen or about 6% to RM3.12 on Tuesday. The stock ended its day at RM3.08, the biggest rise in a single day since Jan 20, after close to four million shares changed hands. The company was valued at about RM2.8 billion based on its last price.
Shares of Mi Technovation has rebounded strongly from US President Donald Trump’s tariff tantrum, gaining more than 30% in value in the last six months.
The consensus are unanimously bullish, with all five research houses tracked by Bloomberg rating the stock a ‘buy’ with average target price of RM4.08 a potential upside of up to 32% from current price.
The semiconductor materials business, which operates under the name of Accurus Scientific and mainly sells solderballs, contributes about 45-55% to Mi Technovation’s earnings.
“The nature of the business is defensive as it is highly dependent on chip production and can pass on any additional costs to end customers in the event of a cost hike given the high entry barrier in the patented solderball,” Public Investment Bank said.
However, there are no indications on the industry valuation as the majority of its regional peers are unlisted, the research house noted.
Further, valuation of technology stocks in Singapore is generally less attractive compared to those in Malaysia, and there would also be an earnings dilution impact, Public Investment flagged.