Malaysian Pacific Industries Stock Surges After Acquisition Bid for Infineon Plant
Malaysian Pacific Industries Bhd (MPI) closed at a more than one-year high on Friday after analysts substantially raised their 12-month target price to RM35, following the company’s ambitious bid to acquire a back-end manufacturing plant from Infineon Technologies in Thailand.
MPI officially announced on Thursday its plan to complete the deal to buy Infineon Technologies (Thailand) Ltd (IFTH) for US$77.95 million (RM327.56 million) by the fourth quarter of 2026.
Financial analysts are highly optimistic about the move.
CIMB Securities, in a research note, assured investors that funding the acquisition will not pose any problem for MPI, given its robust financial position, which includes RM988 million in net cash and the substantial proceeds recently generated from the sale of two land parcels in Bayan Lepas earlier this year.
The acquisition of the IFTH facility is strategically expected to contribute significantly to MPI’s top line, adding an estimated 8 percent to 12 percent of revenue in the financial year ending June 30, 2027 (FY2027) and FY2028.
This revenue boost is projected to lift the company’s three-year compound annual growth rate for core net profit to a strong 24 percent for the FY2025-FY2028 period.
The research house subsequently raised its target price to RM35, a new valuation that proactively factors in the expected earnings growth from IFTH, the surging demand from artificial intelligence data centers, and the anticipated recovery within the global automotive market.
This new valuation is based on a 25.3 times price-earnings ratio (PER) for end-FY2026, signaling confidence in MPI’s future earnings trajectory.
Analyst Consensus on Deal Value and Future Earnings Potential
Leading investment banks view the acquisition of the Infineon facility as a strategically astute move, citing its low valuation relative to book value, the immediate expansion of MPI’s manufacturing footprint, and the expected synergies in technology and margin improvement.
CIMB Securities characterized the deal as a “good buy” because it is priced below the company’s book value, which offers an immediate financial advantage.
The firm believes the transaction strategically strengthens MPI’s long-standing partnership with Infineon, simultaneously diversifies its geographical footprint into Thailand, and crucially opens the scope for significant margin improvements at the IFTH operation by applying MPI’s operational expertise.
Separately, RHB Investment, while maintaining its financial forecasts for the immediate term, also raised its target price for the company to RM35, based on expected earnings for FY2026.
RHB acknowledged that the PER might appear high, but argued that the acquisition still makes strong business sense for three compelling reasons: first, the low price-to-book ratio of 0.7 times indicates excellent value; second, building a comparable new facility from scratch would take substantially longer and cost far more; and third, the semiconductor industry is widely expected to rebound, which should significantly lift future earnings.
RHB further believes that the deal with Infineon will unlock doors for valuable tech sharing and cost savings, enhancing MPI’s competitive edge.
Market Reaction and Strategic Positioning for High-Growth Sectors
The stock’s immediate surge to a one-year high reflects strong market approval of the acquisition, positioning MPI favorably within high-growth technological sectors such as AI and automotive electronics, which are expected to drive future performance.
Following the announcement, the stock rose to an intraday high of RM29.80 before closing 2.03 percent higher at RM29.12, its highest closing price in over a year, giving MPI a total market value of RM6.11 billion.
This market reaction demonstrated the immediate support and confidence of investors in the company’s strategic direction.
The stock was the top gainer for the day, with 947,600 shares traded, indicating strong investor interest and volume.
RHB Investment reiterated its positive stance, stating, “Despite the terrific share price run in recent months, we still like the stock for a stronger FY2026 performance, technology road map, and strong foothold in high-growth segments.”
This sentiment is particularly important as the acquisition secures MPI a key role in the supply chain for a major global chipmaker like Infineon, which is a market leader in automotive and industrial power semiconductors.
Although only two research houses currently have a “buy” call on the stock, both maintain target prices substantially above the 12-month consensus of RM25.73, suggesting a polarization of views but a high conviction among the most bullish analysts.
The fact that three firms rate it ‘hold’ and three have a ‘sell’ call highlights the technical nature of the semiconductor industry and the varied risks and rewards perceived by different market players.
