KUALA LUMPUR (May 18): Mi Technovation Bhd’s net profit for the first quarter ended March 31, 2020 (1QFY20) grew 49.9% to RM10.3 million, from RM6.87 million a year earlier, on higher sales revenue.

The increase, the group said in a filing today, was due to lower commissions payable to external sales agents, and foreign exchange (forex) gains on a stronger US dollar against the ringgit, which in turn also mitigated the impact of higher general and administrative expenses.

The Penang-based semiconductor industry equipment provider reported an unrealised gain on forex of RM6.46 million, versus an unrealised loss on forex of RM702,000 for the previous corresponding period.

Quarterly revenue rose 19.54% to RM35.24 million, from RM29.48 million a year ago, due to stronger demand from customers in the North East Asia region, resulting from growth in capital investment from certain outsource semiconductor assembly and test firms in the advanced/wafer level packaging segment.

On prospects, Mi Technovation expects the first half of 2020 (1H20) to remain status quo as most of its customers have not revised their capital expenditure budgets.

“At this juncture, there is little visibility for 2H20 as our customers are adopting a wait-and-see approach due to numerous variables, which are unresolved, such as the timing of containment of the pandemic and trade war tensions,” it added.

The group, however, said the long-term positive outlook had been made clearer by Covid-19 as more applications are being developed, ranging from home medical devices, disinfectors, tracking algorithms and others for mass usage.

“We seek to benefit from this as higher-performance applications and real-time data require more advanced technology and higher density of semiconductor content,” said the company, adding that automating the supply chain is crucial to minimise disruptions stemming from manpower risks and labour shortage.

“We believe that overall growth in demand for chips will still be intact as technology advances,” it added.

Mi Technovation shares closed six sen or 2.61% lower at RM2.24 today, valuing the group at RM1.67 billion. The counter, over the past year, has risen by 40% from RM1.60.