CIMB Research maintains Neutral on Unisem

Monday, August 1, 2011

KUALA LUMPUR: CIMB Equities Research is maintaining its Neutral call on Unisem Holdings Bhd and retains its RM1.40 target price.

It said on Monday, Aug 1 that Unisem management’s downbeat tone during Unisem’s 2Q11 results briefing and the slight delay in the loading of its tier-1 customer surprised it though there had been hints in its 2Q announcement.

“The positive takeaway was the greater push towards copper wire bonding, its goal of being a world-class supplier, which would help bring in more tier-1 customers and its relook at its processes to cut cost.,” it said.

CIMB Research said taking its cue from the subdued guidance, it cut its FY11 EPS forecast by 16% but maintain our FY12-13 numbers as earnings should normalise then.

“The earnings adjustment has no impact to our RM1.40 target price as we continue to value the stock at a 10% discount to its five-year P/BV of 1.0x. As there are no re-rating catalysts in sight and near-term prospects are weak, we maintain our NEUTRAL rating,” it said.


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