A LAGGARD GEM BEHIND THE TECHNOLOGY SECTOR’S RALLY

Despite the high number of COVID-19, “excellent” management of cluster and political “ding dong” by our beloved government, it is such a delight to see our technology sector still performing well.

Anyway, lets focus on the actual sector’s performance thus far.

As we can see, technology sector remains resilient and has become the top performing industry under the Malaysia market. Some companies with the “TEC” in their name had even triple in share price in a short period of a month.

But as we all know, not all tech shares face the same treatment in the market. One company that had seen it’s share price still in the low territory is ARB BERHAD (KLSE:7181).

Based on the technical movement, ARB BERHAD is still trending upwards despite the recent crash. However, the share priced had slumped from 40.0 cents level to the current 25.5 cents level.

Also, the sector had very good growth potential. I quote Hong Leong Investment Bank’s content that was published to the forum.

"KLTEC outperformed the broader index in 1H21 (KLTEC +13% vs KLCI -6%). The latest industry average growth projection of 13% is perceived to be rather reserved vs our ~20% estimate. As for 2022, the sector is expected to be in expansionary mode with 9%. Capital spending is expected to reach another record on the back of strong fab construction pipeline. However, weaker greenback outlook may dent the sector’s prospect. We are not overly concern on the rising input prices as tech players are believed to be able pass through the additional costs. Growth is expected to be driven by smartphone, communication, HPC, IoT and auto."

 

With that, I believe ARB BERHAD was still underappreciated by the market. Heightening demand for artificial intelligence and twin technology and precision farming by industries worldwide will stoke the market growth, suggests Fortune Business Insights™ in its report, titled “Internet of Things (IoT) Market, 2020-2027”. The report mentions that the market stood at USD 250.72 billion in 2019.

So far, ARB BERHAD was the only true company that was heavily involved in the IoT segment.

I strongly believe, we could see some interest in the company soon due to its undervalued nature!