Maybank IB upbeat on semiconductor sector, reiterates positive rating

KUALA LUMPUR: Maybank IB Research has reiterated its positive rating for the Malaysiantechnologysectoras it remains upbeat on the global and domestic semiconductor supply chain’s upcycle, and think that prospects for the sector will be sustained at this juncture.

Its opinion is backed by key catalysts such as the 5G network deployment with the high adoption rates and stronger demand and supply for 5G devices, as well as growing sub-sectors including automotive/electric vehicles, Internet of Things, artificial intelligence, medical/life science and the Industrial Revolution 4.0.

In its research note, it said the World Semiconductor Trade Statistics (WSTS) projected global semiconductor sales to grow 8.4 per cent year-on-year (yo-y), and the Semiconductor Equipment and Materials International association estimated global fabrication equipment spending to increase by 13 per cent 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 nearterm earnings growth catalyst, as well as robust domestic liquidity.

“Meanwhile, most of the 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