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US segment showing uptick, China segment is below the peak in FY22 despite China's strength in semicon market share, US-China trade tension will continue regardless of the election outcome, inventories remained elevated, low return for shareholders - high cash balance, low dividend payout and have not seen share buybacks. The plus side - pockets of growth driven by automotive and industrial applications, capex and started construction for new factory in Ipoh and China. These will probably take a few years before seeing positive returns; at least 5 years? Perhaps its better to have higher margins of safety while hoping for better FY2025.
its just that the company is not willing to make the right decision from dividend perspective; higher return to shareholders. Dividend here can be cash dividend or buybacks. More reason not to do so now with construction started for the new factories; capex intensive for the next 3 to 5 years.
Trump's presidency may not benefit MPI due to tariffs/China trade wars. It was a low period for MPI in FY18 and FY19. Need to manage it well and keep an eye on China segment. Unlikely to go above FY22 performance.
Best to avoid sectors where China is leading or companies with exposure to China segment; just in case he were to go all out on tariffs for made in China products. Uncertainty is for sure with his presidency :) On the other hand, companies with exposure to US segment with zero China segment may benefit from trade wars - trade diversion.
Well, my opinions is that we may see a slowdown in electronics sector. Trade diversion may not be good enough to push the whole semiconductor industry. Malaysia's biggest trading partner is China and Singapore by exports value followed by US. Glove sector with US exposure may benefit well as this sector was growing well until pandemic which has then seen the emergence of cheap made in China gloves flooding the market.
Inari's major geo segment is Singapore and Singapore is Malaysia's top trading partners. As much as integrated chips / semiconductor export is concerned, Inari will be affected for good or for bad during Trump's presidency. In FY2019, two major factors driving lower performance for Inari/Singapore segment - lower semiconductor demand and heightened trade wars. The forecast for semiconductors industry revenue growth for 2024 and 2025 is double digit respectively with 2025 growth lesser than 2024. Slice it down further and a question to ask ourselves - are there new technology anticipated in 2025 that will drive demand for semiconductors? Heightened trade wars is expected with Trump's presidency and we will know in due time whether 2025 will be a slow down for semiconductor / electronics sector.
Thanks, Augustine. any local public listed beneficiary for these AI data centres? and demand for AI chips started last year based on Nvidia's revenue growth. Will it taper off heading into 2025? Perhaps thats how market intelligence report pointing to slower growth in 2025 compared to 2024.
frontken, natgate. AI/ data centres trend is mega trend, it wouldnt last only for a year or two. in 2024 data centres are just in construction stage, ai server demand actually not yet started. 2025 tech stock will perform better than 2024, my expectation.
still waiting. will Trump's presidency marks the return of low period for MPI similar to fy18 and fy19? We should also monitor the tone between Trump and Xi :) Any signs of heightened trade wars warrants a more cautious and defensive plans. after all, construction for the new factories have just started and high capex over the next two to three years; from construction to fit out, commissioning and start-up assuming no unforeseen delays.