Kenanga Research & Investment

Author: kiasutrader   |   Latest post: Tue, 2 Mar 2021, 8:51 AM


Daily technical highlights – (MBMR, SLVEST)

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MBM Resources Berhad (Trading Buy)

  • MBMR is principally involved in the trading, marketing and distribution of motor vehicles and related spare parts. They also provide hire purchase and lease financing facilities.
  • As a proxy to national carmakers with a 22.58% stake in Perodua, MBMR could benefit from the prevailing low financing costs and the government’s extension of sales tax exemptions for motor vehicles (until end-June 2021).
  • Going forward, consensus is expecting MBMR to make a net profit of RM145.7m in FY Dec 2020 and RM177.2m in FY Dec 2021, which translates to undemanding forward PERs of 8.9x and 7.3x, respectively.
  • Technically speaking, the stock appears to be making higher lows, as: (i) the November 2020 bottom is marginally higher than the March 2020 bottom, and (ii) the most current swing low is a higher low than the November 2020 low.
  • Over the last few days, the emergence of several hammer candlesticks is also a positive indicator, signalling the rejection of lower prices.
  • Bouncing off the recent swing low, MBMR’s share price could hit the resistance levels of RM3.70 (R1; 15% upside potential) and RM4.06 (R2; 26% upside potential).
  • We have pegged our stop loss price at RM2.75 (15% downside risk).


Solarvest Holdings Bhd (Trading Buy)

  • SLVEST provides engineering, procurement, construction, commissioning (EPCC), as well as management, operation and maintenance services for solar projects.
  • The Group’s EPCC project tenders are increasing as businesses increasingly turn to solar energy for its economic benefits while fulfilling their sustainability goal. The future looks bright for the Group as they are a potential beneficiary of the rolling out of the upcoming large scale solar (LSS) projects.
  • Since the sharp price correction in March 2020, its share price has subsequently been riding on a steady uptrend, forming higher highs and higher lows.
  • In the most recent swing low, the long tail wicks suggest rejection of lower prices.
  • Based on the Fibonacci Retracement, of which the share price has respected on numerous occasions, the shares could reach new heights as it continues its current upward momentum.
  • With the MACD line crossing above the signal line, the stock will probably continue to rise and challenge our resistance targets of RM2.30 (R1; 13% upside potential) and RM2.50 (R2; 23% upside potential).
  • We have pegged our stop loss at RM1.79 (12% downside risk).

Source: Kenanga Research - 21 Jan 2021

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Related Stocks

Chart Stock Name Last Change Volume 
MBMR 3.35 +0.05 (1.52%) 587,000 
SLVEST 2.42 -0.06 (2.42%) 4,657,200 

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