KUALA LUMPUR: Maybank Investment Bank Research expects 2017 will be an interesting year especially for the smartphone supply chain, with Apple’s next iPhone launch in September 2017 potentially packing a punch for its 10th year anniversary.
It said on Thursday that alongside growth in infrastructure spending (i.e. data centers) to support tomorrow’s advancement in technology applications, these will translate to demand/visibility for the semiconductor segment.
“Also, persistent strength in US dollar beyond our base assumption of USD1/MYR4.15 should also boost net exporters’ earnings.
“Nonetheless, we remain Neutral on the sector as valuation is fair at 15 times 2017 PER for expected earnings growth of 30%. Inari is our only Buy pick,” it said.
Maybank Research expects Malaysian technology names like Inari and Globetronics which involved in those segments to resume their double-digit earnings growth in 2017.
“For now, we prefer Inari for its (i) consistent job wins from Broadcom and (ii) new forays which could boost near-term earnings.
“While we are currently neutral on ViTrox, its transition to the new Campus 2.0 in 2H17 could be a re-rating catalyst as constraints on capacity are lifted.
“As for Globetronics, while we believe that earnings recovery would likely happen in 2H17, the stock remains a Sell on pricey valuations (20 times CY17 PER) despite a 116% on-year jump in 2017E earnings,” it said.