KUALA LUMPUR (Sept 21): Unisem (M) Bhd (KL:UNISEM) is approaching an earnings inflection point that could see its profit after tax growth outpace revenue growth, according to CIMB Securities.
The semiconductor packaging and test services provider is set for stronger earnings from the second half of FY2026, driven by a ramp-up in production from customers, a turnaround at wafer-bumping operation Unisem Advanced Technologies (UAT), higher utilisation at its Gopeng Phase 1 facility and a shift towards higher-value flip-chip packages, the research house said.
CIMB Securities raised its earnings per share forecasts for Unisem by 3% for FY2026, 69% for FY2027 and 64% for FY2028, citing improving utilisation and the resulting operating leverage.
As incremental revenue is absorbed by a more highly utilised asset base, margins are expected to recover meaningfully, providing further earnings leverage into FY2027, it said in a Friday (Sept 18) note.
Shares of Unisem fell 15 sen or 3.4% to RM4.30 at the time of writing on Monday, with 932,500 shares changing hands. The stock had a market capitalisation of RM7.37 billion.
CIMB Securities upgraded Unisem to “buy” with a target price of RM5.50, saying the next leg of growth could come from its Gopeng Phase 2 (GP2) expansion, with construction scheduled to start in the fourth quarter of FY2026.
GP2 will comprise two 100,000 sq ft sections, with one housing a new wafer-bumping facility with an initial capacity of 30,000 wafers per month, expandable to 60,000 wafers per month. The other section will be designed to accommodate either advanced packaging or additional bumping capacity, depending on customer demand.
Unisem is seeking to de-risk the expansion through long-term agreements, customer-consigned equipment and potential upfront funding contributions from customers, according to CIMB Securities.
These measures should provide greater visibility on demand ahead of the capacity additions and reduce the risk of prolonged under-utilisation, while allowing the company to scale capacity in line with committed customer demand, it said.