Kenanga

Greater reliance on domestic suppliers could help Malaysian technology hardware companies improve operating margins and reduce inventory holdings, although the benefits have yet to translate into stronger cash conversion, according to Kenanga Research.

The artificial intelligence (AI) investment cycle is entering a second phase in 2026, with demand broadening beyond GPUs to inference, AI agents and commercial applications, creating new opportunities across optical connectivity, power, advanced packaging and semiconductor equipment, Kenanga Research said on Monday.

Malaysia’s electric vehicle (EV) market is gaining momentum, with year-to-date sales more than doubling in the first eight months of 2026 as automakers shift towards locally assembled models, while competition from Chinese brands and national marques is reshaping the automotive market, according to Kenanga Research and BIMB Securities.

Kenanga Research said Monday that advanced packaging will become the next battleground in semiconductor value chain and benefit Malaysia's technology players.

While Malaysia's technology sector is structurally exposed to energy cost volatility, its earnings impact is partially mitigated by cost pass-through mechanisms, Kenanga Research said in its recent report.

Kenanga Research expects Malaysia's utility-scale solar activity to gradually pick up in the second quarter, supported by moderating solar module prices.

Kenanga Research has on Friday downgraded Malaysia’s technology sector rating to neutral from overweight as external risks have intensified, particularly from global memory tightness, supply-chain fragility and persistent cost pressure across the value chain.

Malaysia's domestic logistics sector fared better amid Middle East tensions as the country is a beneficiary of booming e-commerce and trade diversion on US-China trade tensions, Kenanga Research said Thursday.

Kenanga Research said Tuesday that the global datacom market boom will spur Malaysia's technology space.

Kenanga Research has foreseen Malaysia's technology up-cycle to remain intact in the first quarter of next year, supported by a still expanding global semiconductor up-cycle and a resilient front-end capex outlook, which should continue to favor Malaysia’s front-end beneficiaries.