KUALA LUMPUR (April 11): CGS-CIMB Research has maintained its “Overweight” rating on the semiconductor sector and said Malaysian semi players are bullish for stronger demand in auto beyond 2022, driven by structural shifts towards electric vehicle (EV), advanced driver assist (ADAS), safety and connectivity.
In a sector update on Monday (April 11), the research house projected 21% and 24% core net profit growth for Malaysian outsource semiconductor assembly and test (OSAT) and automated test equipment (ATE) sectors in 2022 respectively.
“We think Malaysian ATE offers better value at this juncture given the sector trades at 27.9x CY22F P/E, nearly 1SD below the three-year sector mean of 34x, while Malaysian OSAT trades at 22.7x CY22F, which is broadly in line with its mean P/E.
“Maintain Overweight on Malaysian semis.
“We like Malaysian Pacific Industries Bhd and Pentamaster Corp Bhd as preferred plays riding on accelerating SiC and GaN adoption in EVs,” it said.
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