Kuala Lumpur, 3 Nov 2025 – Unisem (M) Bhd’s latest results paint a story of resilience amid transition. The semiconductor packaging and testing firm continues to ride the wave of global demand for power management, automotive, and AI-related chips. However, despite impressive top-line growth, rising pre-operating costs and valuation concerns are tempering the near-term upside.
Earnings Snapshot: Strong Revenue, Softer Margins
For the first nine months of FY2025, Unisem reported core profit after tax and minority interest (PATAMI) of MYR26.9 million, down 35% year-on-year. While this figure was broadly in line with expectations, profitability was dragged by start-up costs at the new Gopeng plant and higher depreciation.
Revenue, however, told a different story. The group’s 9M25 sales surged 19% YoY to MYR1.39 billion, surpassing forecasts, thanks to strong momentum from its Chengdu operations and improving utilization in Malaysia.
Margins were squeezed — EBITDA margin fell to 17% (from 18.9%) due to pre-operating expenses and expanded headcount, while higher tax rates further dampened the bottom line. The company maintained a steady dividend payout, declaring a third interim dividend of 2 sen per share.
Quarterly Highlights: Chengdu Leads the Charge
The momentum continued into 3Q25, with revenue hitting another record high — marking the seventh consecutive quarter of USD-denominated revenue growth (+5.6% QoQ to USD116.8 million).
Unisem’s Chengdu plant remains the star performer, contributing about 65% of total revenue and driving the bulk of profitability. Demand was broad-based, supported by:
- Power management ICs for smartphones and servers,
- Automotive-related chips, and
- AI-peripheral components, including MEMS microphones and sensors.
This translated into a 33.5% QoQ and 79% YoY jump in core PATAMI to MYR19.6 million.
However, the Malaysian operations remained loss-making, constrained by sub-optimal utilization and rising manpower costs. Capital expenditure moderated to MYR115.5 million (from MYR185.6 million), with total headcount increasing slightly to 7,310.
Outlook: Revenue Strength, Malaysian Recovery to Lag
Looking ahead, management expects flattish to higher revenue in 4Q25, a notable achievement given seasonal year-end slowdowns. Growth will be supported by:
- Robust demand for MEMS microphones,
- Power Management ICs for data centers and servers, and
- Rising EV-related semiconductor content.
While Chengdu is expected to maintain strong utilization, Malaysia’s turnaround will take time — the Gopeng plant is only expected to break even by 3Q26, once production ramps up and customer qualifications are completed.
Valuation & Recommendation: Downgrade to Neutral
Following the stock’s 78% rally over the past six months, analysts have downgraded Unisem to NEUTRAL (from Buy), citing limited near-term upside as valuation has reached a premium level of 36x P/E (+1.5SD above its 5-year mean).
Despite trimming FY25–FY27 earnings forecasts (-2.5% to +4.0% adjustments), the target price (TP) has been raised to MYR3.78 (from MYR2.93), reflecting a roll-forward of valuation to mid-FY27F and inclusion of a 2% ESG premium. The TP is pegged to an unchanged 30x P/E, or +0.5SD from its historical mean.
Key Risks
Downside Risks:
- Slower-than-expected customer orders,
- Technology obsolescence, and
- Unfavourable currency fluctuations (MYR/USD).
Upside Risks:
- New contract wins,
- Faster-than-expected ramp-up in Gopeng, and
- A weaker Malaysian Ringgit boosting USD-denominated revenue.
Leave A Comment