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technical focus
Technical Focus

Technical Focus – AEMULUS

Engages in the design and development of automated test equipment (ATE) and test and measuring instruments (TMI) for the semiconductor industry. The 40:60 joint venture with Tangren Microtelligence Co Ltd bears fruit, given that contribution from China makes up to 39.3% total revenue in FY21 as oppose to only 11.3% recorded in FY20. Counts of several institutional funds such as Kenanga Growth Fund, Manulife Investment Progress Fund, Hong Leong Balanced Fund and among others are in their top 30 shareholders list. Technically, traders may anticipate for a breakout above RM1.13, targeting next resistances at RM1.19-1.25 with long term target set at RM1.40.

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market pulse
Market Pulse

Turning point

The FBM KLCI rebounded from Omicron-induced selloff earlier, led by banking heavyweights and window dressing activities may have started. We reckon the
overnight rally at Wall Street may spill over to the local bourse amid fading concerns over the Covid-19 Omicron variant. Besides, market may keep an eye on China’s economic data (inflation and PPI) which will be releasing on Thursday. On the local front, the government will be deciding on the 5G wholesale model by Jan-2022 and aims to reach 80% of the populated areas with 5G roll-out may benefit the telecommunication sector. Commodities wise, the crude oil price advanced to close above the USD75 per barrel mark, while the CPO price extended gains.

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Stock Digest

Kelington Group Bhd – 7Dec21

Following the latest win, KGB’s year-to-date orderbook replenishment now stood at
approximately RM976.0m; exceeding our expectations of RM900.0m for the year. We gather that year-to-date contract wins represents record high orderbook replenishment for KGB, which is a testament for the group’s capability to undertake
larger number of work orders.

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market pulse
Market Pulse

Seeking for rebound

The FBM KLCI surrendered gains from the previous session as sentiment remained weak, in line with negative performances on the regional bourses. However, Wall Street has rebounded strongly overnight with the view that the Covid-19 Omicron
variant may cause milder illness than earlier strains; this may provide buying support to the local equities. Closer to home, we should expect some rebound on the key index as investors may be repositioning into value stocks or heavyweights moving into the year-end window dressing period. On commodity markets, crude oil prices settled 4.6% higher at USD73 per barrel after Saudi Arabia raised prices
for its crude sold to Asia and the US, while the CPO price saw slight rebound.

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technical focus
Technical Focus

Technical Focus – ECOWLD

Established brand presence across three key economic regions in Malaysia with 20 projects include new townships, integrated commercial developments, luxury high-rise apartments and green business parks. Launched Phase 1 of Cheerywood in its Eco Majestic township in Semenyih, Selangor, on 27th November 2021 that comprise 346 two-storey Park Homes, Classic Homes and Garden Homes. Eco Majestic (60.0% developed) will deliver long term sustainable income upon various stages of developments overtime. Technically, traders may anticipate for a breakout above the RM0.88 resistance level, targeting the next resistances at RM0.94-1.00, with long term target at RM1.10.

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market pulse
Market Pulse

Back above 1,500

The FBM KLCI ended marginally higher prior to the public holiday on Friday with investors bargain hunt on heavyweights. We believe investors will be focusing on blue chips this month on the local front on the back of window dressing activities. However, the negative sentiment from Wall Street may keep the upside limited given the ongoing worries over the Covid-19 Omicron variant as well as the inflationary pressure, where market participants might be anticipating a shift in Fed’s tone towards more hawkish stance in monetary policies going forward. On the commodity markets, the CPO price hovered around RM4,650, while the crude oil price is currently below the SMA200 of USD73 per barrel mark.

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macquarie structured warrants 20200914
Macquarie Warrants

Attention returns to Malaysia stock warrants on Omicron news

The trading week was shortened in view of a special public holiday announced for 3 December 2021 for all three federal territories, leading to a 30.4% decline in overall warrants turnover to RM215.9mil. Attention on the glove counters, namely Top Glove Corporation (TOPGLOV) and Supermax Corporation (SUPERMX), lingered into last week as the new Covid-19 variant Omicron continues to make headlines.

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technical focus
Technical Focus

Technical Focus – ELSOFT

Engages in the research, design and development of test, burn-in and application specific embedded system with key clients include multinational companies like Philips, Avago, Osram, Cree Technology and Liteon. Focused on the expansion of its product range to include front-end testing equipment in relation to the LED market. Capitalising on the solid global semiconductor sales that rose 27.6% YoY to USD48.3bn in September 2021. Technically, price has rebounded off the daily EMA60 level and traders may anticipate for further upside to target the next resistances at RM1.06-1.10 with long term target at RM1.20.

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market pulse
Market Pulse

FBMKLCI drifting below 1,500

The FBM KLCI tumbled below the psychological 1,500 level as market reacted to Covid-19 Omicron variant developments, as well as the overnight selldown on Wall Street following more hawkish comments from Jerome Powell. We believe volatility may remain on the local bourse, taking into account government’s
decision to bar travellers from eight countries with confirmed cases of Covid-19 Omicron variant and tracking the negative performance from Wall Street.
Nevertheless, downside may be cushioned by the improved Malaysia’s November Purchasing Manager Index (PMI), which signalled improved operating condition. Commodities wise, the crude oil price remains soft, but the CPO price staged a mild rebound.

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Stock Digest

Jaks Resources Bhd – 1Dec21

Elsewhere, the property development segment is expected to continue dragging
overall performances, on the back of the lacklustre occupancy rate. With the influx and overcapacity of new retail shops and malls, attempts to improve occupancy rate will be difficult, in our view. Still, a silver lining will be seen from the handover of
Pacific Towers business hub by end-2021.

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Stock Digest

Kelington Group Bhd – 1Dec21

We gather that the record high orderbook replenishment year-to-date at RM891.0m already makes up to 99.0% of our orderbook replenishment target of RM900.0m for FY21f. Moving forward, KGB’s outstanding order book stood at RM932.0m which
represents an orderbook-to-cover ratio of 2.4x against FY20 revenue of RM394.6m will provide earnings visibility over the next 2 years.

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market pulse
Market Pulse

Volatility still a feature

The FBM KLCI rebounded, bucking the negative momentum across the regional markets as bargain hunting activities emerged after five sessions of selldown. However, tracking the overnight significant losses on Wall Street, the upside may
be limited and our local market may remain volatile amid concerns over the development surrounding the Covid-19 Omicron variant. Nevertheless, some investors may take advantage to add positions into glove companies. On the oil
prices, a report by Reuters saw a slower pace of supply increases from OPEC+ in November but OPEC+ expected an oversupply situation of global oil in 1Q2022;
crude oil plunge more than 5%. Meanwhile, CPO price declined near to 4%.

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Stock Digest

Econpile Holdings Bhd – 30Nov21

Already, Econpile has bagged a contract from Tunku Abdul Rahman University College worth RM22.7m (7.6% of our targeted orderbook replenishment) in
1QFY22. Moving forward, Econpile is equipped with an unbilled construction orderbook of approximately RM820.0m; representing an unbilled orderbook-tocover ratio at 2.0x against FY21 revenue of RM420.1m that provide earnings
visibility over the next two years.

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Stock Digest

Suria Capital Holdings Bhd – 30Nov21

Moving forward, the gradual re-opening of economic activities will keep port activities busy, and that may meet our projected total tonnage of 25.0m tonnes in FY21f. We also note that the construction of a new jetty at Sapangar Bay Oil Terminal (SBOT) is on track for completion in 1H22. The move will boost the
capacity to undertaking additional port activities as current utilisation rate is averaging at 80.0-90.0%.

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market pulse
Market Pulse

Imminent rebound

The FBM KLCI started the week on a negative note, in tandem with the selldown on regional bourses amid the Omicron variant fears. However, we believe the overnight Wall Street positive performance may provide some buying support on
the local equities as we think the selling pressure is overdone at least for the near term, contributing to oversold signals and hammer candles on most of the stocks. Also, some economists claimed that the economic impact stemmed from Covid-19 Omicron variant will be less severe than that in 2020. On the commodity markets, a mild rebound was noticed in both CPO and crude oil price.

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technical focus
Technical Focus

Technical Focus – COMFORT

Established in 1993 with manufacturing plants housed at Simpang and Matang, Taiping, Perak with 58% of revenue are derived from overseas market. Plans to build a production facility in Bemban, Batu Gajah, Perak that will be capable of producing up to 14.5bn gloves per annum. Equipped with a solid balance sheet with a net cash position of RM299.7m, translating to net cash per share of RM0.51 (c.42.1% of share price) as of 2QFY22. Technically, price has formed a resistance breakout above RM1.20, targeting the next resistances at RM1.32-1.39 with long term target at RM1.55.

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market pulse
Market Pulse

Dampened by new Covid-19 variant

The FBM KLCI swung lower for the fourth straight session amid concerns over new Omicron Covid-19 variant; foreign investors stayed as net sellers, pulling out RM42.8m from the local bourse on Friday. The worries on the emergence of new
Covid-19 variant may result in a mixed sentiment as the data such as infectivity and mortality rate will only be known by another 1-2 weeks. In the meantime, tracking the mild rebound in overseas futures at the point of writing, there is a
slight chance for a technical rebound move today, but upside will be capped as Covid-19 concerns remain valid. Commodities wise, the crude oil price dropped over 11.0% as market worries that the Covid-19 conditions may eventually result in oil supply surplus, while the CPO price fell.

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Stock Digest

AME Elite Consortium Bhd – 26Nov21

In 2QFY22, overall performance was dragged down by the weaker contribution from the construction segment that was affected by the slowdown in work progress for the on-going construction projects. Going into the second half of the financial year, we expect a strong pickup in work progress alongside with the re-opening of economic activities under the National Recovery Plan (NRP) as we gather that AME’s operations has returned to full scale since October 2021.

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market pulse
Market Pulse

Market sentiment remains weak

The FBM KLCI continues to trend lower amid the ongoing reporting season without any fresh catalysts to boost the market sentiment; foreign funds remain as net seller. We believe the softer trading activities might be due to the spiking in Covid-
19 cases locally and the release of weaker-than-expected results during this reporting season due to FMCO situation in 3Q21. Market may consolidate further
until end of the month, before heading into the window dressing period in the month of December. As we are undergoing the NRP, the recovery theme counters may be picking up in tandem with the opening of vaccinated travel lanes next week, but Covid-19 concerns (daily cases are above 6k) might limit the upside potential. For the commodity markets, both the CPO and Brent crude oil prices were flat.

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Stock Digest

Optimax Holdings Bhd – 25Nov21

YoY, Optimax’s net profit jumped 84.6% on the back of (i) gradual recovery in the number of patients for cataract and refractive surgeries amid the NRP, including patients who have postponed their treatment during FMCO in June 2021, (ii) new
revenue stream derived from the provision of vaccination services via national vaccination programme (PICK) and [email protected], (iii) effective marketing effort, and (iv) better control of operating costs after encountering multiple lockdown which increased the group’s margin.

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Stock Digest

OCK Group Bhd – 25Nov21

Moving forward, OCK will be leveraging on the evolvement of 5G services, targeting 36.0% of high-density areas including in major cities in Johor, Selangor, Penang, Sabah and Sarawak in 2022. Under the JENDELA programme, OCK has an outstanding orderbook of RM80.0m. We also note that OCK has secured a turnkey contract for the implementation of broadband access service through satellite connectivity from Numix Engineering Sdn Bhd (Numix) valued at RM115.2m over 2 years.

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Stock Digest

Protasco Bhd – 25Nov21

In general, it was another stale quarter for Protasco with the absence new construction contracts in 3Q21. We foresee the remainder of FY21 to remain
unchanged for the construction segment. Albeit that, Protasco will be able to leverage on its past expertise to ride onto the Budget 2022 announcement for the construction of low-cost housing projects; PPAM and we note that tenderbook is currently at approximately RM3.00bn.

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market pulse
Market Pulse

Still flattish

The FBM KLCI was flat after fluctuating between the positive and negative territories as market remain cautious on the back of gradual rise in Covid-19 cases. Meanwhile, the November Federal Reserve meeting minutes may point to a soonerthan-
expected tightening of monetary policy if the inflationary concerns persist. Closer to home, investors should monitor Malaysia’s inflation rate which will be released later today as this might impact market’s direction going forward. As the vaccinated travel lanes (VTL) between Malaysia and Singapore will be opened on
29th November 2021, this might trigger selected buying interest on the recovery theme stocks. On the commodity markets, the CPO price rose above RM4,900,
while the crude oil remained supported above the USD82 per barrel mark.

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Stock Digest

Leong Hup International Bhd – 24Nov21

Moving forward, we believe the reopening of business activities following the Covid-19 vaccination should bode well for the group. Nevertheless, ASP of poultry products may continue to fluctuate as recovery pace is expected to be uneven across its operating markets. We remained optimistic on Malaysia and Singapore markets are entering endemic phase, while other countries like Vietnam, Indonesia
and Philippines have begun to gradually relax lockdown measures.

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technical focus
Technical Focus

Technical Focus – SNC

One of the leading rubberwood furniture manufacturers in Malaysia with exposure in the trading of logs and sawn timber and construction activities. Secured RM34.5m construction works on 7 property development projects in Melaka in mid-2021 and will continue to lookout for opportunities on under-served residential market in Melaka. Although timber prices have softened since mid-2021, we gather that current prices are still very much above pre-Covid-19 levels which may sustain profitability. Technically, price has formed a short-term consolidation breakout above RM0.60, targeting the next resistances at RM0.69-0.755 with long term target at RM0.85.

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market pulse
Market Pulse

Momentum still dour

The FBM KLCI closed lower after erasing its earlier gains on the plantation counters, outweighing the rally in banking and healthcare heavyweights. Also, we believe the upside on the technology stocks might be limited, mirroring the overnight losses on Nasdaq. Commodities wise, the crude oil price charged higher and extended its gains above USD80, while the CPO price performed a declining
move, falling more than 2% yesterday. Nevertheless, we think the decision by Joe Biden, ordering release of US oil reserves may post some pressure on the crude oil price moving forward.

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