$DUFU / 7233 (DUFU TECHNOLOGY CORP. BERHAD) - Expects that the worst is over

From what I've been reading over the years, DUFU's management team has always been on the conservative side when making any statements and forecasts. So now, for the first time in a while, that their tone has started to turn positive, it's worth paying attention to.

Dufu had just announced a pretty solid set of results, with PAT rising about ~90% QoQ and ~150+% YoY, understandably coming from a low base, alongside another 1.5sen dividend. For those who had been following the memory market, you'd know that it was one of the hardest hit sectors vs other tech supply chains; but the latest results are not particularly surprising considering that both WD and Seagate had reported improving numbers in recent months.

Even other HDD players like $TEXCHEM / 8702 (TEXCHEM RESOURCES BERHAD) $NOTION / 0083 (NOTION VTEC BERHAD) $JCY / 5161 (JCY INTERNATIONAL BERHAD) in bursa alluded to the improving prospects in the sector.

On one hand, since the information is already "quite widely known", I wonder if the good numbers are already priced in considering DUFU had rallied from ~RM 1.7 to ~RM 2.3 this year. However, regardless of that, I, and so does DUFU's management, believe that the memory sector is reaching that pivoting point where "the worst is over" and we may start to see incremental improvements over the longer term here.

1. DUFU says that 2023 was "the lowest point" in the HDD market cycle, and that they are at the tail end of an unprecedented market downturn.

2. Within their operational businesses, they are seeing modest increase in demand.

3. They believe that the global semiconductor sales are picking up, and that the memory sector is seeing a potential onset of a new growth cycle.

4. Inventory adjustments has been completed and they are seeing increased demand in electronics and AI-related applications.

5. They are confident that the toughest phase is over and are looking towards growth again.