This article first appeared in Capital, The Edge Malaysia Weekly on December 25, 2017 - December 31, 2017

ELECTRONICS & electrical (E&E) players — particularly those in the semiconductor segment — dominated the top gainers among mid-cap stocks with a market capitalisation of RM500 million to RM1 billion.

Pentamaster Corp Bhd topped the gainers, rising 290% year to date to RM2.44 on Dec 15, with JHM Consolidation Bhd close behind, gaining 268% YTD to RM3.

Other semiconductor players among the top 20 gainers are D&O Green Technologies Bhd (128%), Elsoft Research (102%) and KESM Industries Bhd (99%).

Global semiconductor sales grew 22% year on year to US$107.9 billion in the third quarter of 2017 — the highest global quarterly sales ever recorded, according to the Semiconductor Industry Association (SIA), amid new device launches in the second half of 2017. In October, SIA said the industry recorded its highest monthly sales ever at US$37.1 billion, up 22% y-o-y.

The robust sales figures speak well for the earnings prospects of semiconductor companies. The strong demand has benefited companies like Pentamaster, whose net profit increased 49% to RM25.58 million from RM17.15 million, as revenue rose 72% to RM185.69 million from RM108.13 million for the cumulative three quarters.

The growth in semiconductor content in vehicles has supported growth in players with significant exposure to the automotive segment, such as JHM and D&O.

Besides companies in the technology sector, several steel manufacturers have made their way to the top gainers list, thanks to the government’s move to impose anti-dumping duties on certain steel imports from China.

Lion Industries Corp Bhd is the third biggest gainer in the mid-cap category — its share price surged 231% to RM1.34 as at Dec 15, against 40.5 sen at the beginning of the year.

The company returned to the black in the financial year ended June 30, 2017 (FY2017) after suffering losses for five consecutive financial years. It posted a net profit of RM27.79 million for the first quarter ended Sept 30, against a net loss of RM2.52 million in the same period last year. Revenue grew 24% to RM637.31 million from RM514.17 million, amid favourable market conditions due to the government’s safeguards.

Another steel miller, Southern Steel Bhd, also made it to the top 20, as investors priced in the impact of the safeguards. The company also turned profitable in FY2017, posting a net profit of RM93.3 million compared to a net loss of RM221.15 million in the preceding year.

There are several construction players among the top gainers, namely Gabungan AQRS Bhd (111% YTD) and ML Global Bhd, whose share price has doubled as at Dec 15.

The top decliner in the mid-cap category is Media Prima Bhd, which fell 45% YTD to 60.5 sen, as the media group dipped into the red in the first three quarters of FY2017 ending Dec 31.

The group is in the process of re-strategising its business portfolio to increase revenue from its non-advertising, non-TV/print, international and digital segments. However, analysts expect this to take time before significant contributions are seen, with some of them expecting the group to remain in the red in 2018. 

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