Technology Sector - RHB Invest 2020-07-03: Still Bullish On Semiconductors; Still OVERWEIGHT

Technology Sector - RHB Invest | SGinvestors.io AVI-TECH ELECTRONICS LIMITED (SGX:BKY) FRENCKEN GROUP LIMITED (SGX:E28) FU YU CORPORATION LTD (SGX:F13)

Technology Sector - Still Bullish On Semiconductors; Still OVERWEIGHT

  • Maintain sector OVERWEIGHT, semiconductor industry recovery expected. Sustained capital equipment spending and the global memory rebound can be expected for 2H20, too. Inventories are stabilising, and dynamic random-access memory (DRAM) pricing is likely to rise.
  • SEMI also expects equipment sales to grow 5.5% y-o-y to USD60.8bn in 2020, on advance logic and foundry spending and new projects in China.
  • Chip sales have bottomed out, and should improve, but the industry is unlikely to see a V-shaped recovery, as moderated growth is more plausible.



Semiconductor demand has risen

  • Semiconductor demand should mainly come from cloud and PCs, where demand has risen due to work-from-home measures taken against a backdrop of global lockdowns. Other segments like smartphones and Internet of Things (IoT) continue to enjoy strong demand globally.
  • The drive towards 5G has also increased the demand for communications infrastructure. Other segments include artificial intelligence, the automotive sector, as well as the high-performance computing segments.


Avi-Tech Electronics (SGX:BKY) reported a strong 2Q20



Frencken Group (SGX:E28)’s share price has exceeded our target price.



Fu Yu (SGX:F13) – stable and resilient.



Top Picks are Avi-Tech, Frencken and Fu Yu.






Jarick Seet RHB Securities Research | Lee Cai Ling RHB Invest | https://www.rhbinvest.com.sg/ 2020-07-03
SGX Stock Analyst Report BUY MAINTAIN BUY 0.500 SAME 0.500
BUY MAINTAIN BUY 0.900 SAME 0.900
BUY MAINTAIN BUY 0.280 SAME 0.280



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