Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
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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