Highlights

Kenanga Research & Investment

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

 

Daily technical highlights – (SCIB, KGB)

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Sarawak Consolidated Industries Bhd (Trading Buy)

  • SCIB is a company that manufactures precast concrete, pipes and industrialized building systems.
     
  • The group is regionally diversified with projects located in Indonesia (to tap into the relocation of the capital city from Jakarta) and Qatar (riding on the FIFA World Cup 2022 event). On the back of its regional diversification strategy, the group has attained an orderbook size valued at RM1.4b as of 3QFY20, which would underpin forward earnings visibility.
     
  • The group has generated a revenue of RM330.4m (+478% YoY) in 9MFY20 thanks to better construction contribution from the EPCC segment. Meanwhile, its net profit increased to RM20.1m (+900% YoY) mainly attributable to higher recognition of construction billings.
     
  • Interestingly, the group is issuing 1 free warrant for every 2 existing shares held with the last day of lodgment scheduled on 3 rd Feb 2021. Take note that the warrants (with an exercise price of RM1.77) are already in the money.
     
  • Chart-wise, the stock has recently tested its 50-day SMA before staging a rebound thereafter. With the shorter-term key SMA still treading above the longer-term key SMA (which indicates a healthy uptrend), we thus expect its upward movement to persist.
     
  • Based on our Fibonacci projections, our resistance levels are set at RM2.41 (R1; +14% upside potential) and RM2.54 (R2; +20% upside potential).
     
  • Meanwhile, our stop loss is set at RM1.81 (-14% downside risk).

Kelington Group Bhd (Trading Buy)

  • KGB provides gas and chemical delivery solutions to the technology industry. The company supplies to on-site gas generators which are used in the electronics, semiconductor and oil and gas industries.
     
  • With China’s initiative to develop its own semiconductor eco-system after seeing the likes of Huawei being banned by U.S. from sourcing from TSMC (the world’s biggest chip maker), this bodes well for the group. For example, SMIC (China’s chip maker) has continued to award more contracts to the group, which has provided earnings visibility for KGB until June 2021.
     
  • QoQ, the group’s revenue has increased to RM98.3m (+27% QoQ) in 3QFY20 following the resumption of operations post MCO with its net income increased in tandem to RM4.9m (+786% QoQ). • Ichimoku-wise, the stock has continued to trend up after finding support at the Kumo-Cloud from late December last year until early January this year. With the bullish Kumo-Clouds still displaying an upward bias, we thus expect the uptrend to persist.
     
  • Ichimoku-wise, the stock has continued to trend up after finding support at the Kumo-Cloud from late December last year until early January this year. With the bullish Kumo-Clouds still displaying an upward bias, we thus expect the uptrend to persist.
     
  • With that, based on our Fibonacci projections, our key resistance levels are set at RM2.55 (R1; +14% upside potential) and RM2.70 (R2; +21% upside potential).
     
  • Meanwhile, our stop loss is pegged at RM1.95 (-13% downside risk).

Source: Kenanga Research - 22 Jan 2021

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Labels: SCIB, KGB

Related Stocks

Chart Stock Name Last Change Volume 
SCIB 1.79 -0.13 (6.77%) 11,312,600 
KGB 2.23 -0.06 (2.62%) 1,958,400 

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