Trade turmoil weighs on earnings of tech sector
BIMB Research said it was maintaining a 'neutral' call on the technology sector.
PETALING JAYA: The technology sector has had a rough start to the year, according to BIMB Research.
The research house said earnings for the first quarter of this year (1Q25) were disappointing across all the manufacturing companies under its coverage.
BIMB Research added that outsourced semiconductor assembly and test (Osat) companies bore the brunt of cautionary strategies.
The research house said Unisem (M) Bhd saw the steepest decline in profit after tax and minority interests, with a drop of 60% year-on-year (y-o-y), while Malaysian Pacific Industries Bhd (MPI) and Inari Amertron Bhd saw earnings contractions of 15% and 18% y-o-y, respectively.
'The weakness was primarily attributed to softer demand and persistent client conservatism in restocking amid ongoing tariff uncertainty,' BIMB Research said, adding it was cautious on the near-term outlook, particularly for Osat companies.
It said despite the Semiconductor Industry Association reporting a rise in global semiconductor sales of 18.8% y-o-y in 1Q25, it was mainly driven by the growing demand for AI-related chips.
'Given that local tech players have limited direct exposure to this high-growth segment, it makes them more vulnerable to cyclical volatility in consumer electronics and industrial applications, which are showing signs of a slowdown.
'Rising geopolitical tensions – especially the renewed threat of US tariffs on non-US made chips – are likely to weigh on investor sentiment,' the research house said.
However, companies like Dagang Nexchange Bhd managed to recover upward trajectory at a pre-tax profit level on the back of ongoing margin improvements and better product mix at Silterra Malaysia Sdn Bhd.
'Information technology services on the other hand, remained resilient, with MyEG Services Bhd and NexG Bhd posting core profit after tax and minority interest growth of 24% and 19% y-o-y, respectively, underpinned by the accelerating digital transformation and steady demand for their services,' the research house said.
BIMB Research said it was maintaining a 'neutral' call on the technology sector, emphasising the divergence between the defensive growth seen in services and the cyclical challenges facing Osat companies.
'We've maintained selective 'buy' recommendations primarily on services, like MyEG at a target price of RM1.54 and NexG at 45 sen. There is a 'buy' on weakness for MPI at RM22.58, 'hold' for Inari at RM2.23, and 'sell' on Unisem at RM1.60. We also maintain our 'buy' call on Dnex at 52 sen for now, pending further review.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
2 hours ago
- Malay Mail
VenHub Launches 24/7 AI-Powered Smart Store at Metro Transit Center at LAX, Leading the Next Era of Autonomous Retail in Travel and Transportation
[email protected] Los Angeles, California - Newsfile Corp. - June 6, 2025 - VenHub Global, Inc. ("VenHub" or the "Company"), a leader in fully autonomous, AI-powered retail, unveiled its flagship Smart Store at the LAX/Metro Transit Center at Los Angeles International Airport. The Smart Store brings secure, frictionless, and fully automated retail convenience to millions of travelers and transit riders moving through Los Angeles each in anticipation of the 2026 FIFA World Cup and 2028 Olympic and Paralympic Games, the installation places VenHub at the forefront of smart retail infrastructure as Los Angeles prepares to welcome the world."Retail should work for people, not the other way around," said Shahan Ohanessian, Founder & CEO of VenHub. "Launching our Smart Store at the Metro Transit Center at LAX represents much more than a store opening. It's about giving people access to what they need, exactly when they need it, with safety and simplicity built into every interaction. Whether you're a traveler heading to the terminal, a commuter catching a connection, or a parent needing essentials after hours, VenHub is ready to serve. Always open, always secure, and always designed around the customer."Ohanessian added, "Being first is not just a milestone, it's a responsibility. As leaders in unattended retail, it's our obligation to keep pushing the edge of what's possible. With over $300 million in Smart Store pre-orders across the U.S. and growing demand from enterprise partners around the world, we are scaling our production capacity to meet this extraordinary is a fully autonomous, AI-powered Smart Store that can be installed in under seven days and operates 24/7 without staff. Using robotics, machine vision, and IoT, each unit delivers a safe, secure, and lightning-fast shopping experience - completing transactions in as little as 90 seconds. Whether fixed or mobile, VenHub's Smart Stores intelligently adapt inventory and merchandising based on location, customer behavior, and time-of-day demand, setting a new standard for access, convenience, and future-ready view an enhanced version of this graphic, please visit:This launch marks VenHub's first deployment in partnership with LA Metro, with additional locations already being planned across Southern California. These Smart Stores will serve transit-connected communities across the region, offering a retail experience that is fast, secure, and completely contactless, available 24 hours a day, 365 days a year."Metro is committed to enhancing every step of our customers' journeys, and that includes the moments they spend in our stations," said Jennifer Vides, Chief Customer Experience Officer. "Partnering with VenHub at the LAX/Metro Transit Center station reflects our focus on innovation and our Board's directive to explore retail and other station-based amenities that improve the overall rider experience. VenHub's 24/7, AI-powered smart retail technology is a forward-thinking solution that adds convenience, engagement, and value to our customers as they travel the Metro system."This partnership underscores the power of combining public infrastructure with private innovation to elevate everyday convenience for millions of June 6, VenHub welcomed the public, government officials, and partners to its grand opening at the Metro Transit Center at LAX. Attendees interacted with the Smart Store, placed live orders, explored the robotics system in action, and met the team behind the view this video? Visit:VenHub is building the retail infrastructure of the future. With a bold vision to modernize access to goods and services, VenHub delivers scalable, autonomous Smart Store technology across the U.S. and beyond. From major metro regions to rural towns, fixed units to mobile deployments, VenHub brings automation, intelligence, and convenience wherever people need AI-powered Smart Stores operate 24/7 with no on-site employees, adapting dynamically to customer behavior, local conditions, and operator settings. With a focus on safety, speed, and scalability, VenHub is setting the new global standard for retail that never sleeps. Following its Southern California expansion, VenHub is preparing deployments for transit hubs and commercial sites in major cities across North America, the Middle East, and learn more, visit:VenHub, a division of VenHub Global, Inc. ("VenHub" or the "Company"), may make forward-looking statements regarding future events or the future financial perrmance of the Company in press releases, presentations, conference calls, or other"believes," "expects," "anticipates," "foresees," "forecasts," "estimates," "intends," "plans," "targets," or other words conveying future outcomes or forward-looking statements involve certain risks, uncertainties, and assumptions that are difficult to predict and beyond the Company's control. Actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors, including but not limited to changes in general economic conditions, the Company's ability to execute its business strategy, competitive pressures, unanticipated manufacturing or supply chain issues, compliance with regulatory requirements, and other risks detailed in the Company's public filings with the Securities and Exchange in these forward-looking statements should be regarded as a representation by VenHub or its management that the Company's objectives or plans will be achieved. VenHub undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable Barry, Alliance Advisors604-997-0965 The issuer is solely responsible for the content of this announcement. About VenHub Global Inc.
The Star
2 hours ago
- The Star
Hong Kong's still ‘over' but Stephen Roach says city a surprise trade war winner
American economist Stephen Roach has said that Hong Kong has benefited from the US-China trade war despite last year having declared the city to be 'over', even as he claimed that other aspects of the financial hub had worsened. The former Morgan Stanley Asia chairman sparked debate last year after he penned an opinion piece which argued, in part, that Hong Kong would be caught in the 'crossfire' of the worsening US-China rivalry. 'The word caught is the word that, if I had to write the piece again, I would probably change, because I think, ironically, Hong Kong has benefited from the crossfire between the US and China,' he told the Post in a recent interview. Despite worsening ties between the two superpowers since US President Donald Trump began levying his so-called reciprocal tariffs on China and the rest of the world, Hong Kong's stock market has seen solid gains. The benchmark Hang Seng Index is up by around 50 per cent since Roach made his original claim, while Hong Kong has rocketed to the top of the global fundraising table following a string of high-profile initial public offerings last month, including from mainland Chinese battery maker Contemporary Amperex Technology. Roach, who is now a faculty member at Yale University, said the 'sell America' trade had become a 'global mantra' and Hong Kong was a beneficiary. But asked whether he felt his initial assessment of the city being 'over' was premature, he noted he would say the same again. 'No economy or city state is over ... but this image of a dynamic, powerful system as part of the 'one country, two systems' model, I think that's just as close to being over today as it was when I originally wrote the piece,' he said, referring to the city's governing principle. 'The governance story is still, I think, very much working against this notion of Hong Kong as a free, independent, autonomous city state. If anything, it's gotten worse.' Roach added that the strong performance of the city's stock market had 'instilled sort of a new swagger in Hong Kong bordering on denial'. He said there were 'questions that could be raised' about the city's independent rule of law, pointing to the departure of foreign non-permanent judges. He also raised concerns about the fast-tracking of the domestic national security law last year and what he described as continuing efforts to 'quash dissent'. While the Hong Kong government had 'risen to the challenge' to demonstrate to the world that the city should be considered 'special', American investors in particular had developed an 'unwillingness' to distinguish it from the rest of China, he said. 'Where I've come out, reluctantly, is that as great a city as Hong Kong is, it's just another big Chinese city,' he said. 'I think it's increasingly a one country, one system model with a solid financial capital raising infrastructure embedded in Hong Kong.' Executive Council convenor Regina Ip Lau Suk-yee, who previously hit back at Roach over his 'Hong Kong is over' remarks, maintained that the American economist did not understand the city. She said the 'pessimistic views' Roach expressed last year 'were primarily based on the Hong Kong stock market's poor performance'. 'He overlooked China's strength in technological innovations and Hong Kong's unique advantages based on its separate systems. We are the only part of China that can invest, manage and provide trading platforms for digital assets.' She cited the city's recently passed law on stablecoins, which she said would help Hong Kong be the country's 'testing ground' for cryptocurrencies. Stablecoins are a type of cryptocurrency token that maintain a fixed value by being pegged to a reference asset, typically fiat currencies such as the US dollar. The law, which was passed last month and is set to take effect later this year, establishes a regulatory regime for stablecoins, paving the way for issuers to obtain licences and sell the digital assets to the public. 'Despite ongoing US-China tensions, Hong Kong will continue to have an important role to play in building bridges between China and the West,' Ip said. - SOUTH CHINA MORNING POST
The Star
4 hours ago
- The Star
Demand for Idul Adha sacrificial livestock drops amid economic slowdown in Indonesia
JAKARTA: Livestock farmers and traders across various regions have complained about a sharp drop in demand for sacrificial livestock during the Idul Adha (Day of Sacrifice) holiday, amid the country's ongoing economic slowdown. Uday, a 41-year-old sheep trader in Bandung, West Java, said he had sold only one sheep on Thursday (June 5) morning, the day before Idul Adha, which falls on Friday (June 6) this year. [The Indonesian government had announced that the Idul Adha (Day of Sacrifice) holiday for the country this year fell on June 6] 'The day before the holiday is usually my busiest and most profitable with buyers typically arriving nonstop even before sunrise. Last year, I sold up to 25 sheep on this day. But today, only one buyer has come to my stall all morning,' he said, as quoted by Kompas. Uday, who prices his sheep between Rp 3 million (US$184) and Rp 5 million each, said he had sold only 10 animals over the past four days, marking a steep drop from last year, when he sold up to 50 sacrificial animals in the lead-up to the holiday. Subari, a cow seller in Batang Regency, Central Java, shared a similar struggle, saying he had managed to sell only 16 cows two days before Idul Adha. 'Last year, I sold 40 cows. But this year, people don't seem very interested in buying sacrificial animals, likely due to the tough economic conditions,' he said on Wednesday. Nizar, a cow farmer from Anambas Islands Regency in the Riau Islands, said his income had dropped sharply compared with last year. 'There are very few buyers this time, a stark contrast to last year. So far, I've only managed to sell four cows. In previous years, I would have already sold 20 to 30 by now,' he said on Wednesday (June 4), as reported by Tribunnews. Galang Saputra, a cow seller at Jetis Animal Market in Ponorogo Regency, East Java, reported that cow prices have fallen by Rp 1 million to Rp 1.5 million ahead of the Idul Adha holiday. 'Instead of rising, prices have dropped due to weak demand,' he said on Wednesday. Sellers at the market have also completely eliminated transportation fees for moving livestock after purchase in hopes of attracting more customers, but with little success. The Institute for Demographic and Affluence Studies (Ideas) estimates that 1.92 million people purchased sacrificial livestock this year, marking a decline of 233,000 buyers or around 12 percent compared with last year. This figure is even lower than during the Covid-19 pandemic, when the institute reported 2.11 million buyers in 2021 and 2.17 million buyers in 2022. Ideas managing director Haryo Mojopahit attributed the decline to a shrinking middle and upper-income class, the primary buyers of sacrificial animals. 'The large-scale purchase of sacrificial animals during Idul Adha is vital to the growth of the country's livestock sector. This sector provides an important source of income for rural communities and acts as a key driver of the local economy,' he said on Monday, as reported by Antara. Haryo added that since the meat from sacrificial animals is mostly distributed to low-income families, Idul Adha also helps narrow the significant gap in red meat consumption between high- and low-income households. A 2024 Ideas survey revealed that individuals in high-income families consume an average of 4.17 kilogrammes of red meat per year, while those in low-income families consume only 0.009 kg annually. Economists said consumer spending power in Indonesia has steadily weakened over the past two years. Wage increases in vital sectors, such as manufacturing, trade and agriculture, have lagged behind rising prices. The situation has been exacerbated by widespread layoffs, including in the primary sector. The country's economy recorded its slowest quarterly growth since Q3 2021, expanding by 4.87 percent. Meanwhile, household spending, which constitutes over half of the nation's gross domestic product (GDP), rose by just 4.89 percent year-on-year in the first quarter of 2025, marking the slowest growth in five quarters, despite increased consumer activity during the Ramadan and Idul Fitri celebrations in March. Overall GDP growth from January to March slowed to 4.87 percent year-on-year, down from 5.02 percent in the previous quarter. - The Jakarta Post/ANN
