KUALA LUMPUR (Dec 16): AffinHwang Capital Research has downgraded Unisem (M)
Bhd to “Sell” (from Reduce) at RM1.83 with an unchanged target price of RM1.54
and said Unisem's stock price has continued to gain positive traction on
accumulation by a major shareholder.
In a note Tuesday, the research house said this could be attributed to: 1) its strong 3Q14 results and the possibility of strong earnings delivery in the subsequent quarters; 2) its exposure to the robust RF business; and 3) the potential for a strong DPS in 4Q14.
“However, trading at 17.3x 2015 EPS, and a premium to peers, we believe that good news is already in the price. On a risk adjusted basis, Unisem is the most expensive semiconductor stock under our coverage.
“With good news priced in and limited re-rating catalyst from this point, we turn anti-consensus on the stock, downgrading Unisem to Sell with an unchanged target price of RM1.54,” it said.
In a note Tuesday, the research house said this could be attributed to: 1) its strong 3Q14 results and the possibility of strong earnings delivery in the subsequent quarters; 2) its exposure to the robust RF business; and 3) the potential for a strong DPS in 4Q14.
“However, trading at 17.3x 2015 EPS, and a premium to peers, we believe that good news is already in the price. On a risk adjusted basis, Unisem is the most expensive semiconductor stock under our coverage.
“With good news priced in and limited re-rating catalyst from this point, we turn anti-consensus on the stock, downgrading Unisem to Sell with an unchanged target price of RM1.54,” it said.
