Select Malaysian tech companies to benefit from sector’s upcycle Picture for illustration only. – REUTERSPIX
PETALING JAYA: The continued global semiconductor supply chain’s upcycle is expected to translate into strong earnings growth for select Malaysian technology hardware companies in 2021-2022 and support the sector’s rerating to richer valuations.
Maybank Investment Research believes the sector’s outperformance in share prices and rerating of valuations are supported by the encouraging outlook of the global semiconductor supply chain, strong near-term earnings growth catalyst, as well as robust domestic liquidity.
Currently the sector under its coverage is trading at CY21/22 price to earnings ratio of 39x/37x.
Among catalysts that will drive the sector for this year include 5G network deployment with the high adoption rates and stronger demand and supply for 5G devices, as well as growing sub-sectors such as automotive/electric vehicles, Internet of Things, artificial intelligence, medical/life science and the Industrial Revolution 4.0.
PETALING JAYA: The technology sector is expected to see a strong earnings growth for the next two years that will support its lofty valuation, according to Maybank IB Research.
In a report yesterday, the research house pointed out that the ‘rich valuations’ of the sector are backed by merits.
The Bursa Malaysia Technology Index has risen almost 27% in less than two months, outperforming the benchmark index FBM KLCI, which had declined 2%.
Maybank IB upbeat on semiconductor sector, reiterates positive rating | Money malaymail.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from malaymail.com Daily Mail and Mail on Sunday newspapers.
Posted : 2021-02-12 09:13
By Kim Bo-eun
The local tech industry is keenly watching President Joe Biden s administration for possible opportunities as new policies have been rolling out following the U.S. president taking office last month.
Attention is being paid in particular on how the new government will deal with the escalating conflict with China over sanctions on key IT companies.
President Biden is expected to engage more with U.S. allies in his diplomatic and economic strategy toward China, but the struggle to obtain the lead in key technologies is seen as likely to continue.
The White House last month referred to Huawei as an untrusted vendor that is posing a security threat to the U.S. A presidential official stated the U.S. would not have its telecom networks use equipment from such vendors and increasingly work with allies in securing their networks.
Global semiconductor industry sales rose 6.5% year-on-year (y-o-y) in 2020 to US$439 billion, from US$412.3 billion a year earlier, said the US-based Semiconductor Industry Association (SIA).