Nvidia-led AI boom sends tech stocks soaring in Malaysia, Vietnam

Southeast Asian AI-related stocks, especially those of companies collaborating with Nvidia, have soared on the back of increased demand from the spread of generative AI.

Vietnamese information technology major FPT Corp.'s stock price hit the 118,000 dong level in mid-March, the highest since its listing in 2006. The closing price on Thursday was 114,900 dong, up about 60% from a year ago and 20% from the end of 2023.

The company's collaboration with Nvidia is pushing up the price. In December, Nvidia CEO Jensen Huang visited Malaysia, Singapore and Vietnam, announcing collaborations with companies.

FPT announced a partnership with Nvidia at a Hanoi conference on semiconductors and artificial intelligence. "AI and chip manufacturing are key factors to catching up with other developed countries and becoming more involved in the global supply chain," FPT Chairman Truong Gia Binh said at the conference in December.

Malaysia's YTL Power International also received a boost from a Nvidia collaboration. The YTL Corp. subsidiary, which focuses on infrastructure, closed at 3.99 ringgit on Tuesday, up more than fourfold from a year ago and 60% from the end of last year.

Huang announced the YTL Power partnership after meeting with Malaysian Prime Minister Anwar Ibrahim. The two companies will work on building AI infrastructure at a data center in the country's south.

YTL Power's half-year results for the July to December 2023 period exceeded market expectations, with net profit increasing 4.8 times year-on-year to 1.7 billion ringgit ($360 million). Sales also increased 15%. Both were lifted by the company's power generation business in Singapore.

Nabil Zainoodin, an analyst at Malaysia's KAF Investment Bank, said that while earnings from the Singapore power business stabilized overall performance, the data center business is increasing YTL Power's future potential.

FPT saw net profit jump 20% last year to 7.78 trillion dong ($310 million). The company's global information technology services segment grew in Japan, Europe and other markets.

Malaysian semiconductor assembler Inari Amertron is also performing strongly in the stock market. Amid tensions between the U.S. and China, supply chain overhauls have led to the shift of some IT and semiconductor production capacity to Vietnam and Malaysia.

Vietnam's market for the semiconductor industry is projected to expand 30% from now through 2027, according to Statista.

Global semiconductor production capacity is expected to climb 6% this year, according to the international industry group Semi, nearing an all-time high. Although the performance of chip stocks has been mixed as of late, demand is expected to pick up on the recovery in the silicon cycle.

Leading Southeast Asian startup stocks, such as Grab and GoTo, have been lackluster due to struggles to become sustainably profitable. Instead, investors have been placing bets on AI investments made by regional tech firms that have been in business longer.

However, some in the market are wary of the surging valuations. On March 1, Vietnam's SSI Securities downgraded its buy recommendation for FPT to a neutral rating, based on the company's share price approaching the brokerage's target.

Source: Nikkei Asia