KUALA LUMPUR (Aug 18): Integrated circuit designer SkyeChip Bhd (KL:SKYECHIP) fell 5% in early Tuesday trade after first-quarter earnings fell short of select analysts' expectations.
The counter fell 16 sen or 4.9% to RM3.09 at the time of writing, valuing the group at RM5.55 billion.
Apex Securities said SkyeChip's first quarter ended June 30, 2026 (1QFY2027) came below estimates, making up 16% of its FY2027 core earnings forecast and 23% of the market consensus.
"While the result was below our expectations, we believe the shortfall was primarily attributable to the timing of milestone-based revenue recognition rather than a meaningful deterioration in underlying demand," the house said in a note on Tuesday, keeping its 'buy' call on the stock with a lower target price (TP) of RM3.76.
SkyeChip posted a 1QFY2027 net profit of RM13.92 million on a gross margin of nearly 42%, fuelled by strong demand for its AI, HPC, and automotive semiconductor solutions.
Revenue reached RM49.62 million, split between silicon IP (52.9%) and custom Asic (46.9%), while excluding RM2.53 million in IPO costs, normalised net profit stood at RM16.44 million.
Apex cut its FY2027/FY2028/FY2029 core net profit forecasts by 22.5%/26.3%/20.6% to RM72.3 million/RM93.9 million/RM126.8 million.
"The revisions reflect the weaker-than-expected 1QFY2027 contribution and, more importantly, a more conservative assumption on the timing of milestone-based silicon IP and custom ASIC revenue recognition.
"While we expect earnings to remain lumpy, we continue to forecast strong medium-term growth as high bandwidth memory or HBM-related IP demand, custom ASIC opportunities and potential ARM-related initiatives scale," it said.
In a separate note, Kenanga Research deemed Skyechip's 1QFY2017 results in line, as earnings recognition is inherently lumpy across quarters due to project milestone timing.
"Looking ahead, we expect SkyeChip’s earnings growth to remain intact, supported by the broadening adoption of customised ASICs and increasing outsourcing of chip-design services".
As such, the house raised its TP to RM3.64 (from RM2.00) after rolling forward its valuation base to calendar year 2028 and increasing its target price-earnings ratio to 65 times from 50 times previously. It kept its 'outperform' call.
"Compared with our initiation report, we now see greater potential for SkyeChip to progress into product and royalty revenue, which represent natural extensions of its existing NRE (non-recurring engineering) and licensing businesses."