Post-Midterm US Data-Centre Risks Could Create Malaysian Opportunities, Kenanga Says
C.R. Lee ·
AI-assisted, reviewed by C.R. Lee
Kenanga Investment Bank’s research team believes uncertainty over US data-centre approvals could create selective opportunities in Malaysian technology, power infrastructure and property stocks. In its November 10 strategy report, the team argues that potential project delays may initially affect sentiment and valuations more than semiconductor earnings. However, it sees no urgency to buy technology stocks broadly following the sell-off.
Why Chip Earnings May Have a Buffer
Kenanga’s model compares approximately 406.9GW of planned data-centre capacity outside China with the AI computing capacity theoretically supported by TSMC’s advanced-node wafer production. Based on assumptions covering AI allocation, chip yields and power consumption, it estimates semiconductor supply could support approximately 322GW across 2027–2028, around 21% below the identified pipeline.
Even under an illustrative scenario in which 50GW of projects are cancelled or deferred, the remaining pipeline would still exceed estimated semiconductor-supported capacity by approximately 10%. Kenanga therefore believes some project delays need not immediately translate into weaker AI hardware orders, as supply already constrains how quickly the pipeline can be delivered.
A Longer Malaysian Investment Runway
The team distinguishes between projects already permitted and those seeking new approvals. If existing US projects proceed, tighter approval requirements could have a greater effect on developments scheduled for 2028–2029 onwards.
Potential overseas diversification would be modestly positive for Malaysia, in Kenanga’s view, mainly by extending the visibility of its data-centre investment cycle. An immediate acceleration remains less certain because local development also depends on power, water and approval availability. The report cites 24 Malaysian applications being held pending resource checks.
Selective Opportunities Across Malaysian Stocks
Within technology, Kenanga remains positive on NationGate Holdings, whose optical-transceiver customer demand is linked to expected GPU shipments and available wafer capacity. It also favours Ambest Group, supported by demand and supply constraints in wafer-fabrication equipment subsystems, and Kelington Group, citing secured revenue visibility for 2027–2028.
For infrastructure exposure, the team highlights Tenaga Nasional and Kee Ming Group. Every new data centre requires substations, electricity distribution and grid connections, supporting investment in power infrastructure and electrical works. Renewable-energy demand could follow, although new solar projects also depend on available grid capacity.
Kenanga considers YTL Power International’s data-centre prospects insufficiently reflected in its share price. It also sees undervalued exposure in Sime Darby Property, Eco World Development Group and Mah Sing Group. Data-centre-related businesses account for approximately 7%–14% of its target-price valuations for these developers, but it believes current share prices effectively discount those contributions despite strong data-centre enquiries.
For more direct construction exposure, the team favours Sunway Construction Group.
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