P.i.e. Industrial Berhad

@terence775 yup noticed that too. Price seemed to move in opposite direction of market sentiment since 11 Mar 2025. I am thinking that the bull has taken over. Noticed the same for $PIE / 7095 (P.I.E. INDUSTRIAL BERHAD) as well

Another take from remisier...

...

🧠 Fresh Oven’s DC Take 🧠

‼️ First Wave of News – 9 Jan

Key developments that jolted the market:

i) Malaysia (MY) classified as a Tier 2 country;
ii) Import restrictions capped MY’s ability to import only 50k GPUs over two years;
iii) Data center operators limited to deploying a maximum of 7% of their computing capacity in any single Tier 2 nation, including MY.

Impact: These announcements triggered a massive selldown across AI/DC-related names, including DC builders, PropCon, Tech EMS, and MEP players, with declines ranging from 7-23% on a sharp reversal from the AI euphoria seen prior to 9 Jan.

Market Observation: Channel checks across Institutional funds, Retailers, HNW, and other investors revealed a black swan reaction, with many rushing to lock in profits or cut losses amidst fears of further downside. This sentiment-driven response resulted in a clear mean reversion among AI/DC names.

That said, not everyone is throwing in the towel; some are eagerly eyeing the opportunity to scoop up bargains at the bottom.

✅ Second Wave of News – Shedding More Light on Hopes? (13 Jan)

Could the MY market react positively? Here’s why optimism is building:

i) Clearer regulatory flexibility with six key mechanisms:

• No restrictions for 18 key allied nations.
• Leeways through U-VEU and N-VEU statuses, allowing up to 50k–320k advanced GPUs under specific conditions.
• Bilateral flexibility via G2G arrangements to address unique needs.

ii) 120-day comment period on the framework, which opens up opportunities to revise or soften the regulations, balancing the initial fallout.

iii) NVIDIA’s Statement on the “AI Diffusion Rule”
• Critiques the Biden Administration for its regulatory overreach, which risks stifling innovation and undermining U.S. technological leadership.
• Asserts that non-enforceability for 120 days provides a window for recalibration.
• Highlights the possibility of policy reversal or moderation under a new administration (e.g., Trump’s inauguration).

🧐 Thoughts / Implications

The market could transition from panic to a more measured outlook on this new variation, supported by:

i) Regulatory flexibility bringing clarity and leeway.
ii) Hopes for policy moderation following Trump’s inauguration (20 Jan).
iii) Structural demand growth tailwinds in AI and data centers, which remain intact despite short-term disruptions.

👋🏻 For long-term investors, this extreme volatility (could be just one of it) presents attractive entry points into:

• Fundamentally strong names positioned to benefit from secular growth trends.
• Perceived-implicated names that are fundamentally unaffected by the new framework.

🔍 Sector Views:

Tech/Semicon: MY OSAT and SPE players are not overly reliant on AI growth in our view, with earnings deriving from FE capex cycles and BE expansion (Auto, Industrial, PC, EV, Medical, RE, Communication, IoT). AI acts as an additional tailwind but isn’t the sole driver.

Most players show better earnings visibility following a prolonged consolidation phase (saved for EV which is still on consolidation now)

Fundamentally, the sector appears less vulnerable to policy disruptions compared to AI-dedicated plays.

EMS: Selective names like NationGate and PIE, heavily exposed to AI server/parts assembly, face greater vulnerability. However, the recent mean reversion (10-23% decline since 7 Jan) has partially priced in the negative news.

NationGate currently trades at 25x 2025 PE, with consensus assuming 3k–5k AI GPU assemblies. Understand that investors into this name are waiting on potential regulatory leeways or policy recalibrations under Trump’s administration, which could soften the impact.

DC builders/owners: Quoting news from The Edge -

YTL Power International Bhd managing director Datuk Seri Yeoh Seok Hong reiterated that the group is the first non-US company selected in Asia to partner Nvidia Corp to deploy and manage a supercomputer driven by the GB200 Blackwell GPUs or graphic processing units in the region. (By The Edge)

🎯Final Take: The odds hinge on whether additional regulatory leeways or a less punitive stance materialize, potentially spurred by Trump’s inauguration.

In the meantime, fundamentally sound, diversified names in Tech and EMS offer compelling opportunities for long-term investors willing to ride out the current volatility. The secular growth story in AI and data centers could be here to stay, and history suggests such disruptions often pave the way for strong recoveries. And of course, all with the right valuation :)

$NATGATE / 0270 (NATIONGATE HOLDINGS BERHAD) $PIE / 7095 (P.I.E. INDUSTRIAL BERHAD) $YTLPOWR / 6742 (YTL POWER INTERNATIONAL BHD)

$PIE / 7095 (P.I.E. INDUSTRIAL BERHAD)
Research Reports by MAYBANK

$PIE / 7095 (P.I.E. INDUSTRIAL BERHAD)
Research by Kenanga
OUTPERFORM – TP RM6.35

" Client Expansion Fuels Future”

PIE’s plan to gear up for mass production for a new client in CY25 at its largest facility, Plant 6, is on track. This will start with assembly before progressing to higher-margin SMT production. It has expanded capacity for Customer A, where its improved IC supply is expected to boost earnings. Additionally, PIE is focusing on higher- margin clients and exploring new business opportunities. We have reduced FY24/FY25 net profit forecast by 22%/6% and lowered our TP to RM6.35. but maintain our OUTPERFORM call.

Analyst:
Cheow Ming Liang
cheowml@kenanga.com.my

Data Centers Enter Installation Phase, Tech & Cybersecurity Stocks Set to Lead

1. Shift to Tech Stocks: With data center projects moving from construction to the installation phase, tech stocks are expected to take the lead, replacing construction-related stocks.

2. Structural Trend: Malaysia is in the early stages of a structural trend in data centers, offering significant opportunities for construction, equipment, and tech companies.

3. Growth in Construction and Property Sectors: The construction and property sectors saw impressive growth in the first seven months of the year, driven by data center expansion.

4. Installation Phase: The installation phase, beginning late 2024 to early 2025, will involve equipping data centers with necessary infrastructure, benefiting tech companies, especially in server-related businesses.

5. Market Opportunities: The potential market for AI servers in Malaysia is estimated at RM97.8 billion, providing significant opportunities for OSAT and EMS companies.

6. Cybersecurity Focus: The expanding data center sector will increase demand for cybersecurity services, with LGMS well-positioned to capitalize on this opportunity.

7. Malaysia's Advantage: Malaysia’s favorable conditions—ample power, stable connectivity, affordable land, and multilingual talent—make it a prime location for data center expansion.

8. Kenanga's Top Picks: Kenanga’s top stock picks in this sector include $PIE / 7095 (P.I.E. INDUSTRIAL BERHAD), $LGMS / 0249 (LGMS BERHAD), and $INARI / 0166 (INARI AMERTRON BERHAD).

$PIE / 7095 (P.I.E. INDUSTRIAL BERHAD)
Research by Kenanga
OUTPERFORM – TP RM6.75

"Improving IC Supply to Drive 2HFY24”

PIE’s 1HFY24 results met expectations. Its net profit rose 7.5% YoY thanks to effective cost control. We learned that integrated circuit (IC) supply constraints from Customer A have eased. This, coupled with the timely commencement of Plant 5, should optimise production for Customer A, paving the way for a stronger 2HFY24. We maintain our forecasts, TP of RM6.75 and OUTPERFORM call

Analyst:
Samuel Tan
samueltan@kenanga.com.my

$PIE / 7095 (P.I.E. INDUSTRIAL BERHAD)
Research by Kenanga
OUTPERFORM – TP RM6.75

" Capitalising on China+1 Trend”

PIE is poised for a stronger 2QFY24 as IC supply shortage from Customer A would have eased, while its production output ramps up using additional floor space from Plant 5. Meanwhile, its new server customer is on track for pilot production in 4QFY24. It is also engaging a potential customer that could result in contracts with attractive margins. We maintain our forecasts, TP of RM6.75 andOUTPERFORM call.

Analyst:
Samuel Tan
samueltan@kenanga.com.my

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Letter Subject or Reference - UNUSUAL MARKET ACTIVITY

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

KUALA LUMPUR: Bursa Malaysia has issued an unusual market activity (UMA) to P.I.E. Industrial Bhd due to the sharp rise in the price and trading volume today.

PIE - Unusual Market Activity

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

$PIE / 7095 (P.I.E. INDUSTRIAL BERHAD)
Research by Kenanga
Outperform – TP of MYR 6.75

“Back on Track After Slight Hiccup”

Currently, PIE is producing at 60% of Customer A’s orders (vs. 30%- 40% in 1QFY24) as integrated circuit (IC) shortages ease. The number should rise further in the coming months. We understand that there is strong demand for Customer A’s products. Its Plant 5 will come in handy next month as it will double the total floor space dedicated to Customer A. We maintain our forecasts, TP of RM6.75 and OUTPERFORM call.

Analyst(s):
Samuel Tan
samueltan@kenanga.com.my

Key Takeaways from $PIE / 7095 (P.I.E. INDUSTRIAL BERHAD) AGM

📌 As of the end of 2023, the management reported having six factories. The fifth and sixth factories have an area of 100K sqft and 280K sqft, respectively. The company expects the fifth factory to be completed by June this year, and the sixth factory by Q4 2024.
📌 Regarding whether the new factories can start operations immediately, the management stated that the fifth factory will go into operation right after completion. This means the third and fifth factories will handle orders from one major client. Currently, the third factory is operating at full capacity (which indicate two factories will manage orders from a single large client).
📌 The sixth factory has also secured new client orders and is expected to start operations by the end of this year.
📌 The management indicated that once these two new factories reach full capacity in 2025-2026, they will each generate RM1B and RM1.5B in revenue, respectively.
📌 The current outstanding order book is approximately RM500 million for FY2024, and the projected revenue growth for this year is around 7% or RM1.3B.
📌 The management emphasized their focus on completing and operationalizing these two new factories to boost the company's revenue sooner.
📌 Regarding the recent US-China tariffs, the management noted that they have not had a significant impact on the company.

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

General Meetings: Outcome of Meeting

26 April 2024

Our Stocks Watchlist

Dufu @ RM1.78 (Now RM2.09) – Hold for long term and should be benefiting from both Seagate and WesternDigital strong Q3 (March 2024) reported with revenue growth and volume of HDD shipped which we have posted for your reading. Both looking at further double digit % growth for Q4 June 2024

Notion @ 59.5 Sen – Though we do not like the management performance and delivery of good result. Company had done kitchen sinking for FY 30 Sept 2023 of RM39 million with impairment of PPE of RM31 million and inventory write down of RM 8 million respectively and Company reported good Q4 Sept result could be in the process of turning around. The Co HDD business will be benefit from Western Digital Growth as WD is the Company’s HDD customer. Monitor their Q1 2024 result and the business outlook and look at the price volume movement to move in.

Notion bonus issue of warrant of 10 for1 and the Company’s securities will be traded and quoted “[EX-BONUS ISSUE]” as from: 02 May 2024 and the last date of lodgment : 03 May 2024

IFCAMSC – just ride on the market momentum and business news on Einvoicing and after Q1 Report would have better feel of outlook.

ADB - just ride on the market momentum and business news on Einvoicing and after Q1 Report would have better feel of outlook.

PIE @RM 3.39 (Now RM5.76) – Too late to board the bus

RGB @30 Sen (Now @40 Sen) – potentially catalyst for further growth to have dominance gaming machines market in Philippines with regularization of the gaming industry and Philippines Players upgrading their facilities with the booming industry. Looking at recent price volume, we think there is still leg to move up

ONG Companies
Deleum@ RM1.30 (Now RM1.43) – good to hold and assess the co progress.

Wasco @ RM1.29 (now @RM– a gem to be for 2024 with project in hand

Coastal – no point cutting now just hold and wait for confirmation of extension of contract and new positive developments.

Ulicorp – value buy below RM1.40 (Now @RM1.50)

SKB Shutters – only for investors with longer term perspective

Samchem – Chemical and distribution business is seeing improvement in performance.


$DUFU / 7233 (DUFU TECHNOLOGY CORP. BERHAD) $NOTION / 0083 (NOTION VTEC BERHAD) $IFCAMSC / 0023 (IFCA MSC BERHAD) $PIE / 7095 (P.I.E. INDUSTRIAL BERHAD) $RGB / 0037 (RGB INTERNATIONAL BHD)

OTHERSP.I.E. INDUSTRIAL BERHAD ("PIE" OR THE "COMPANY")

DISCLOSURE OF MATERIAL INFORMATION PURSUANT TO PARAGRAPH 9.03 OF THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

PIE - Notice of Book Closure

Interim Dividend

OTHERSP.I.E. INDUSTRIAL BERHAD ("PIE" OR THE "COMPANY")

DISCLOSURE OF MATERIAL INFORMATION PURSUANT TO PARAGRAPH 9.03 OF THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

$PIE / 7095 (P.I.E. INDUSTRIAL BERHAD)
Research by Kenanga
Outperform - TP of MYR6.75

“A Slice of AI Pie”

PIE, we understand, via referral from a key shareholder, has secured a new sizeable AI server client that will take up the entire Plant 6 (c. 280k sq ft), its largest facility. We understand that PIE will be the new customer’s sole contract manufacturer outside of China. We raise our FY25F earnings forecast by 10%, lift our TP by 69% to RM6.75 (from RM4.00) and reiterate our OUTPERFORM call.

Analyst(s):
Samuel Tan
Fsamueltan@kenanga.com.my

Annual Report & CG Report - 2023

P.I.E. INDUSTRIAL BERHAD ("PIE"or "the Company") CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

General Meetings: Notice of Meeting

TECHNOLOGY
$KLSE-D&O $KGB / 0151 (KELINGTON GROUP BERHAD) $INARI / 0166 (INARI AMERTRON BERHAD) $PIE / 7095 (P.I.E. INDUSTRIAL BERHAD) $UNISEM / 5005 (UNISEM (M) BERHAD)
Research by Kenanga
Neutral

“4QCY23 Report Card: Seasonality and Cyclical Uptick”

The sector’s earnings delivery (against our expectations) improved in the recently concluded 4QCY23 reporting season sequentially on the back of a combination of seasonality and potentially the start of a cyclical upturn. D&O (MP; TP: RM3.60) reported its highest quarterly revenue and a 33% QoQ jump in net profit driven by restocking by its Chinese clients. PIE (OP; TP: RM4.00) reported improved orders across the board while KGB (OP; TP: RM3.40) delivered another record-breaking number on robust project deliveries and improved margins. Keeping in mind seasonality in 4QFY23 numbers, we advocate investors to cherry-pick proven names such as: (i) KGB for its strong earnings visibility backed by a RM1.3b order book, (ii) INARI (OP; TP: RM4.05) on its growing its exposure to China smartphone and AI-fuelled data centre boom, and (iii) PIE for its strong earnings growth trajectory that is driven by a wide range of customers.

Analyst(s):
Samuel Tan
samueltan@kenanga.com.my

OTHERSPROPOSED RENEWAL OF SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND PROPOSED AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES

$PIE / 7095 (P.I.E. INDUSTRIAL BERHAD)
Research by Kenanga
Outperform - TP of RM3.40

"A Growing Pie"

Slated to be fully occupied by a single existing customer, PIE is currently installing equipment in its Plant 5, which is expected to be operational by 2QCY24. It has on-boarded four new customers which will contribute 8%-12% of its FY24F total revenue while demand from its existing customers will continue to stay robust. We maintain our forecasts, TP of RM4.00 and OUTPERFORM call.

Analyst(s):
Samuel Tan
samueltan@kenanga.com.my

$PIE / 7095 (P.I.E. INDUSTRIAL BERHAD)
Research by Kenanga
Outperform - TP of RM4.00

"Ends FY23 on a High Note, Bright FY24"

PIE’s FY23 results beat expectations. Its 4QFY23 core net profit jumped 38% QoQ thanks to resilient orders and write-backs. It is poised for a strong FY24 with the onboarding of four new customers and robust orders from existing customers. We raise our FY24F net profit forecast by 5%, lift our TP by 5% to RM4.00 (from RM3.80) and maintain our OUTPERFORM call.

Analyst(s):
Samuel Tan
samueltan@kenanga.com.my