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Market Daily Report: Bursa Malaysia Gives Up Earlier Gains To End Mixed

KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
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Unisem Shares Fall to Near Three-Month Low on Disappointing 2Q Results

 

Shares of Unisem (M) Bhd extended their decline to the lowest in nearly three months following weaker-than-expected second quarter results.

Stock Performance:

  • Share Price: Unisem fell by as much as 4%, or 16 sen, to RM3.83, the lowest since May 14, 2024.
  • Market Capitalisation: At 9.25 am, the stock was trading at RM3.84, giving the company a market capitalisation of RM6.19 billion.
  • Trading Volume: The trading volume totaled 149,800 shares.

Analyst Reactions:

  • RHB Research and CGS International: Both noted that Unisem's core earnings were below expectations, affected by lower margins from the product mix and additional operational costs.
  • RHB Research: Despite the earnings miss, RHB maintains a 'buy' rating with a higher target price of RM4.40, citing cautious optimism from Unisem's management about higher loadings in the second half of 2024 (2H2024).
  • CGS International: Maintained a 'reduce' call with an unchanged target price of RM2.00, highlighting Unisem’s 41% year-on-year decline in core net profit due to rising staff costs.

Operational Outlook:

  • Unisem’s Management: Anticipates a strong ramp-up in its Chengdu operations in 2H2024, driven by key projects such as MEMs microphone modules for mobile devices and power module applications for the China market.
  • Utilisation Rate: Near full capacity for flip-chip bonding, with preparations for capacity ramp-up at phase 3 Chengdu operations.
  • Ipoh Operations: Production outlook remains subdued due to soft legacy radio frequency businesses for smartphones and new projects expected to ramp up by FY2025.
  • Gopeng Plant: Started new pilot projects and aims to consolidate Malaysian operations in the longer term, also housing backend production lines as part of the China Plus One strategy.

Analyst Commentary:

  • RHB Research: Believes in a recovery with quarter-on-quarter improvement and stronger loadings ahead, consistent with the overall sector trajectory. Recommends positioning to ride on the new semiconductor cycle.
  • CGS International: Notes the strategic co-investment in testing equipment with key customers and the preparation for a production ramp-up, but remains cautious on the immediate outlook.

Unisem’s strategic efforts to ramp up production and adapt to market demands signal a potential recovery, but the immediate challenges and earnings miss reflect ongoing operational hurdles.

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