Affin Hwang Capital starts coverage on Electronics Manufacturing Services sector

Affin Hwang Capital starts coverage on Electronics Manufacturing Services sector

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KUALA LUMPUR (Oct 10): Affin Hwang Capital Research has initiatiated coverage on  the Electronics Manufacturing Services (EMS) sector with an “Overweight” rating.

In a note today, the research house said the sector is not merely  a beneficiary from the trade diversion but also set to ride on the rapid expansion of their common key customer - a global renowned household appliances brand.

“ATA IMS Bhd (Buy, TP: RM1.80), is our preferred sector pick, as we expect the group to continue charting strong growth on the back of capacity expansion coupled with margin enhancement from further vertical integration.

“We also initiate coverage on V.S. Industry Bhd (Buy, TP: RM1.60) given the group’s diversified customer mix and strong ability in securing new contracts, which makes it a prime beneficiary of trade diversion.

“Elsewhere, we highlight 3 other companies, namely SKP Resources Bhd (Non-rated, RM1.08), i-Stone Group Bhd (Non-rated, RM0.18) and MTAG Group Bhd(Non-rated, RM0.42), which form part of the "D" ecosystem,” it said.