Kenanga Research has an “overweight” stand on the technology sector.
PETALING JAYA: Several technology and electronic manufacturing services (EMS) players in the country are ready to ride the next data centre boom.
They include, PIE Industrial Bhd
, Nationgate Holdings Bhd, Malaysian Pacific Industries Bhd and Inari Amertron Bhd.
Even LGMS Bhd, being the only pure-play cybersecurity services company in Malaysia is set to reap significant benefits from the development, said Kenanga Research.
Cybersecurity in local data centres is an opportunity that has yet to receive the attention it deserves.
Among the major construction players in the data centre space, Kenanga Research said, Southern Score Builders Bhd, a mechanical and engineering contractor for data centres, also stands out as a potential hidden gem that has been largely downplayed.
The research house has an “overweight” stand on the technology sector with its top picks being PIE, LGMS and Inari.
It has an “outperform’’ call on PIE, LGMS and Inari and target prices of RM6.75, RM1.90, and RM4.60, respectively, for the companies.
There are many other players who could be involved in the data centre business, with offerings ranging from development to specific services, as Malaysia positions itself to become the fastest-growing location for data centre expansion among neighbouring countries.
Malaysia has the potential to support over 3,000 megawatts (MW) of IT capacity, the research house noted.
Currently, the live IT capacity in Malaysia is still below 500MW, indicating that the country is in the early stages of a structural data centre boom reminiscent of the initial phase of the government’s large-scale solar programme in the solar-energy sector.
The addressable market for AI servers in the country is estimated at RM97.8bil.
“This estimation modestly assumes that 40% of the incremental IT capacity (around 2,600MW in this scenario) will be allocated to AI servers, which typically consume about 11kW each,” Kenanga Research said.
Even though local companies in the outsourced semiconductor assembly and test business and EMS players may be relatively new to the server-related business, they are well-versed in servicing multinational corporations, the research house added.
