KUALA LUMPUR (July 28): Inari Amertron Bhd and D&O Green Technologies Bhd remain PublicInvest Research's top picks based on their compelling valuations and leading positions in their respective spaces. 

In a note on Thursday (July 28), the research house issued an "outperform" recommendation for both Inari and D&O, with target prices of RM4.13 and RM5.46 respectively.

It said Inari is poised to benefit from greater adoption of 5G globally, and capitalise on the US smartphone super-cycle in the coming quarters, while D&O expects strong multi-year growth on the back of rising market share in the global automotive light-emitting diode (LED) market as smart LEDs are increasingly used, especially for ambient lighting.

Inari Amertron’s share price was trading up four sen or 1.44% at RM2.82, translating into a market value of RM10.46 billion. The counter, however, has fallen 30.37% year-to-date. It is currently trading at a historical price-earnings ratio (PER) of 25.84 times, with a dividend yield of 3.65%. 

D&O rose 2.02% to RM4.04, valuing it at RM5 billion, but the stock has depreciated 31.76% since the beginning of the year. Its PER stood at 55.96 times. 

“Dragged by the aggressive global rate hikes, investors have ditched the more expensively-valued sectors like technology in recent times. 

"As a result, sector valuations have fallen more than 36% year-to-date to current levels of 22 times earnings multiple (from about 35 times previously). 

“We believe investors should take the opportunity to relook at quality technology names with a competitive edge and strong track record,” said PublicInvest. 

The research firm maintained its "overweight" stance on the technology sector.