KUALA LUMPUR – Maybank IB Research has reiterated its positive rating for the Malaysian technology sector as it remains upbeat on the global and domestic semiconductor supply chain’s upcycle, and thinks that prospects for the sector will be sustained at this juncture.
Its opinion is backed by key catalysts such as 5G network deployment with high adoption rates as well as stronger demand and supply for 5G devices, in addition to growing sub-sectors including automotive/electric vehicles, Internet of Things, artificial intelligence, medical/life science and the Fourth Industrial Revolution.
In its research note, it said the World Semiconductor Trade Statistics projected global semiconductor sales to grow 8.4% year-on-year (y-o-y), and the Semiconductor Equipment and Materials International association estimated global fabrication equipment spending to increase by 13% y-o-y in 2021.
“We believe the sector’s outperformance in share prices and re-rating of valuations are supported by the encouraging outlook of the global semiconductor supply chain, strong near-term earnings growth catalysts, and robust domestic liquidity.
“Meanwhile, most technology hardware companies are also backed by healthy balance sheets with a net cash position/low gearing – supportive of merger and acquisition opportunities,” it said.
The investment bank’s top picks for “buy” include Inari, Globetronics, and Frontken. – Bernama, February 18, 2021
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