Our recent visits to technology companies in Penang reaffirm our positive view on the sector’s earnings prospects due to near-term earnings boost by the smartphone splash, longer-term earnings sustainability on diversification of products and customer base, as well as companies moving up the value chain. These companies will ride on the upcoming trends: a) optical laser sensing (such as 3D sensing for consumer electronics), b) Industry 4.0, c) evolution in automotive space, and d) IoTrelated applications. Maintain OVERWEIGHT on the sector.

Source: UOB Kay Hian Research - 28 Jul 2017