FOCUS OF THE DAY
Technology Sector : Riding high in 2H18 Overweight
2H18 earnings to be driven by sensors, radio frequency chips and operational efficiencies. We are upgrading our stance on the technology sector from NEUTRAL to OVERWEIGHT. The sector’s outlook over the next 6 months is positive in 2H18.
The key theme of the sector in 2H18 should revolve around connected cars, smart homes and automation. This paints a positive outlook for sensor and radio frequency (RF) chip manufacturers, automated equipment manufacturers and companies looking to improve operational efficiencies through automation. In the smartphone segment, while sales volume is plateauing in developed markets, sensor and RF content continues to increase. Overall, earnings prospects are looking positive for local semiconductor companies.
Key beneficiaries. In 2H18, companies in the limelight are Inari Amertron (BUY, FV: RM2.50), Malaysian Pacific Industries (MPI) (BUY, FV: RM11.42), Unisem (HOLD, FV: RM2.56) and Globetronics (UNRATED) given sensors and RF are imperatives in a connected world, while prospects of ViTrox Corporation (UNRATED) and Pentamaster Corporation (UNRATED) are also exciting amid the rising adoption of automation.
Others:
MISC : Marginal contribution from FSO Mekar Bergading Hold
QUICK TAKE
Plantation Sector : News flow for week 2 – 6 July Neutral
RETAIL RESEARCH
Stocks On Radar: Magnum, PMB Technology, Astro Malaysia Holdings, Coastal Contracts
ECONOMIC HIGHLIGHTS
US – Robust labour market; rate hikes seen on track
NEWS HIGHLIGHTS
Construction Sector : Prasarana mulls taking over LRT 3
MMC Corp : Northport plans biomass hub
Astino : RM60mil plant to be ready by end-2018
Property Sector : Concorde Kuala Lumpur redevelopment plans on hold
DISCLAIMER:
The information and opinions in this report are prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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