KUALA LUMPUR (May 13): Shares of Mi Technovation Bhd (KL:MI) surged to their highest in more than two years as analysts continued to urge investors to buy the semiconductor company, following an over four-fold jump in first-quarter (1Q) net profit.

Mi Technovation added as much as 51 sen or 26.19%, its highest since February 2022 before ending the day at RM2.30 — still up 35 sen or 17.95%, valuing the company that provides semiconductor equipment and testing at RM2.06 billion, after more than 36.31 million shares changed hands.

Analysts were broadly bullish even as the latest results were a tad below expectations, with the core net profit at RM17.4 million accounting for only 23% of the street’s full-year estimate, after stripping out foreign exchange gain.

Public Investment Bank, one of four research houses covering the stock, maintained its “outperform” rating after lowering its FY2024-FY2026 forecast earnings by 7-9% to account for “a more conservative stance” on equipment deliveries.

Year-to-date, Mi Technovation shares have climbed more than 27.07% and have risen about 64.29% over the past year, mirroring the recovery in the technology sector after last year’s sharp decline.

Out of the four analysts covering the stock, three have assigned a “buy” call, with only CGS International rating Mi Technovation at “hold”, according to Bloomberg data. The consensus 12-month target price is RM2.33, a potential gain of another 4.5% from the last price of RM2.23.

Inter-Pacific Research, meanwhile, said it is maintaining its “buy” call, pending an analyst briefing later.

Last Friday (May 10), Mi Technovation reported to Bursa Malaysia that its net profit for the first quarter ended March 31, 2024 (1QFY2024) had more than quadrupled to RM26.79 million from RM6.4 million in the same period last year.

The company attributed the strong earnings performance to a combination of higher revenue, which rose by 39.4% year-on-year to RM107.13 million, due to increased customer demand and foreign exchange gains amid the strengthening US dollar.

On its outlook, Mi Technovation said that it will continue to diversify and expand its business scale, despite macro challenges and uncertainties in the semiconductor industry.

“We remain focused on developing and delivering differentiated products to our customers through continual innovation. Barring any unforeseen circumstances, the management is cautiously conservative about the group’s prospects in 2024,” it added.

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Mi Technovation’s 1Q net profit jumps over fourfold on higher revenue, forex gains