PETALING JAYA: Low-profile Sam Engineering & Equipment (M) Bhd is not one of the first names that comes to mind when talking about semiconductor-related stocks on Bursa Malaysia.

       But that seems to be slowly changing, at least going by how investors have been increasingly buying the counter.

       SAM Engineering’s share price had come to life since last July, when it was only trading at around the RM7 level.

       Since then, it had been steadily rising, hitting a high of RM25.70 earlier this month, before easing to RM21.60 in line with the overall weaker market.

       At this price, the stock trades at a historical price-earnings of 36.40 times.

       Although this is not as high as some other semiconductor players, the market does seem to attribute a decent high value to the company, which has exposure in semiconductor front-end and storage devices under its equipment segment.

       SAM Engineering also manufactures parts for the aerospace industry – its main income earner before Covid-19 hit demand as clients reduced aircraft production due to disruptions in air travel.

       Fortunately for SAM Engineering, the semiconductor sector was seeing an upcycle, resulting in a healthy pipeline of orders for its equipment business.

       The semiconductor segment has shown significant growth with pre-tax profit increasing from RM16.9mil in the first quarter ended June 30, 2020 to RM79.8mil in the third quarter ended Dec 31, 2021.

       “The stock has been riding the semiconductor uptrend. And with air travel gradually picking up, the loss-making aerospace segment is poised to benefit,” said one industry observer.

       SAM Engineering in its recent third-quarter financial year 2022 (FY22) results noted that aircraft deliveries from clients Airbus and Boeing in 2021 have increased by 24% from 723 to 951 aircraft.

       Citing data from the International Air Transport Association, it added that there was improved air-passenger travel in December last year to about 55% of pre-Covid levels.

       Meanwhile, an analyst expects semiconductor orders to remain intact although the Russia-Ukraine conflict could affect the global supply of semiconductors.

       He added that with the arrival of 5G, Internet of Things and cloud computing, semiconductors are a growing element across all sectors and applications.

       The Semiconductor Equipment and Materials International estimates that in 2022 and 2023, global semiconductor equipment sales will be in excess of US$110bil (RM461.6bil).