| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading technology company is poised for a robust start to 2026, driven by strong operational performance and the strategic unveiling of a new business unit. Management maintains a bullish outlook, anticipating significant momentum in the first quarter of fiscal year 2026.
Performance Review
The company demonstrated strong operational performance in FY25. A notable factor contributing to this was a significant upward revision in average selling prices for patented small solder ball models, which saw increases of 30-100%. This was primarily attributed to the ongoing global memory chip shortage. Geographically, Taiwan remained the top sales market, contributing 39.1% of revenue, followed by China (28.5%) and Southeast Asia & India (18.6%). By application, Mobility & Wearables dominated, accounting for 72.2% of sales. The SMBU segment, particularly through Accurus Taiwan, was a primary driver of earnings. Additionally, total solder production at the Tainan plant saw a 21.4% year-on-year increase, achieving an estimated utilisation rate of 85%. While the Mi Korea segment successfully halved its losses to RM4.5m, the SSBU segment recorded a net loss of RM27.5m, largely due to a loss from Ohima Hangzhou and an impairment loss on a 30.75%-owned entity.
Future Outlook and Strategic Initiatives
Looking ahead, management is targeting strong double-digit growth for the first quarter of FY26, primarily propelled by its SEBU and SMBU units. A significant strategic move involves the unveiling of the new Vehicle Technologies Business Unit (VTBU) under Ohima International. This unit will focus on electric powertrain systems for heavy-duty electric trucks, buses, and construction machinery, with an initial focus on 120-550 kW main drive power. The VTBU is expected to contribute positively to the company’s performance this year. The company has allocated a capital expenditure of USD25m (RM100m) for the current year. Furthermore, the construction of a new 210,000 kk/mth-solder ball plant in Senai, Johor, is on track for commercial operation by 2027, signaling further expansion and capacity enhancement.
Investment bank TA SECURITIES maintains a BUY recommendation on the stock, setting a target price of RM0.25, representing a potential upside of 25.0% from its last traded price of RM0.20.
