On May 28th, as major tech giants plan to invest billions of dollars in infrastructure in Southeast Asia over the next few years, equity investors are seeking investment opportunities related to artificial intelligence themes.
Due to relatively lower energy and land costs in Southeast Asia, the number of data centers being built in the region is increasing. This has put power companies in the spotlight for investors. Companies in the IT services, telecommunications, and semiconductor industries are also expected to benefit from this trend.
Kenneth Tang, portfolio manager at Nikko Asset Management, stated, "We are interested in utility companies that provide electrification and grid support."
With relatively lower production costs and a significant position in the global semiconductor value chain, Southeast Asia is poised to become a potential next hub for data centers.
Morgan Stanley predicts that by 2027, the Southeast Asian region will become the world's second-largest non-US data center provider, second only to China, laying the foundation for the multi-year growth cycle of related supply chain companies.
Analysts suggest that several companies are most likely to capitalize on the booming development of artificial intelligence.
Since signing an agreement with NVIDIA to build a $4.3 billion AI data center in Johor, Malaysia, the stock price of local utility company YTL Power has doubled.
In a report last month, Charles Yonts, an analyst at Macquarie Group, wrote that as Malaysia's only data center operator with a self-owned 500-megawatt solar power supply, YTL Power "should stand out to those looking for clean energy and rapid capacity customers."
Mayank Maheshwari, an analyst at Morgan Stanley, wrote in a report on May 15th that Malaysia's sole power utility, Tenaga Nasional, will be "the biggest beneficiary of ASEAN data center growth." They said that strong power demand will help the company double its profits within three years.
Tenaga Nasional expects data center power demand to exceed 4,300 megawatts by 2035. Initiatives in renewable energy by Tenaga Nasional will also enhance the company's attractiveness. The company's stock price has risen by 32% this year.
HSBC Holdings technology analyst Wern Juan Chng is optimistic about Thailand's data center and electric vehicle power module supplier, Delta Electronics. He stated, "Given customers' requirements for resilient supply chains and cooling solutions, Delta Electronics is set to be a major beneficiary of upcoming AI data center construction in ASEAN."
In March this year, Delta Electronics expanded its manufacturing capacity for electronic products and is building a new factory to produce components for automotive, cloud computing, data centers, and AI sectors.
Gulf Energy, a Thai power company, is also expected to benefit from the growing power demand and expanding data center infrastructure. Morgan Stanley analysts stated that Gulf Energy "has a strong position in energy and infrastructure businesses, with a range of green energy projects domestically and internationally."
Gulf Energy is seeking to increase data center power capacity, with the first phase planned for completion by March next year. The company is also partnering with Singapore Telecommunications Limited to attract more hyperscale users.
Furthermore, Vietnam's largest listed technology company, FPT, has seen its stock price rise by nearly 40% this year, partly due to optimism brought by its collaboration with NVIDIA. Ruchir Desai, fund manager at Asia Frontier Capital Ltd., expects the software and telecommunications company to achieve profit growth of over 20% in the next two to three years.
