HLIB Research maintains Overweight on Technology sector


-A +A

KUALA LUMPUR (July 27): Hong Leong IB Research has maintained its “Overweight” rating on the Technology sector and said athough Apple delivered stellar results beating market expectations, share price was down 7% in after-hours trading on last Tuesday due to forward guidance.

In a note today, the research house said it was not overly concerned and kept its Overweight stance on Malaysian tech sector, especially those with exposure to Apple’s supply chain.

“Flat/softer quarter for Apple as consumer hold back their purchases for next generation iPhone 6S/6S+ which are expected to hit the shelves by year end or 4QCY.

“Unexciting revenue growth guidance may also due to the stronger USD. As of 3QFY15, circa 60% of sales originated outside of Americas.

“Ahead of new product launch, Apple may embark on trade-in/buyback programs to clear existing stocks leading to weaker GP margin,” it said.

HLIB Research said its top picks were Unisem (M) Bhd (Buy, RM2.82) and Inari Amertron Bhd (Buy, RM3.67).