KUALA LUMPUR (Dec 8): Affin Hwang Capital has upgraded MTAG Group Bhd to "buy" from "hold", and revised up its target price to 98 sen from 82 sen.

It sees MTAG as a laggard sector play amid the recent run-up in the electronics manufacturing services (EMS) space, supported by its decent earnings growth backed by robust orders and expansion underway.

Affin Hwang Capital’s analyst Tan Jianyuan said in a Dec 7 note that MTAG is expected to take delivery of eight new machines, which should see current capacity expanding by 20%, in anticipation of robust future customers’ orders.

He also gathered that MTAG is in the midst of getting qualified for new customers recently secured by its EMS peers.

“The ongoing supply chain rerouting out of China continue to be a multi-year secular trend, driving EMS sector growth. This should benefit MTAG’s earnings as a result of robust customer new order flows,” said Tan.