Maybank Kim Eng analyst Lai Gene Lih is remaining “positive” on the Singapore technology sector on the back of the robust end-demand for chips.

To this end, he has indicated that he continues to prefer beneficiaries of chip shortages such as UMS, Frencken and AEM over contract manufacturers with diverse end-markets like Aztech Global, Venture Corporation and Valuetronics.

“We believe a material driver of Frencken and UMS’s outperformance year-to-date (y-t-d) has been due to earnings momentum being stronger than expected. We continue to see potential for Frencken and UMS to positively surprise in the next one to two quarters, on the back of still strong demand momentum from customers,” he writes in an Aug 23 report.

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