Kenanga Research & Investment

Author: kiasutrader   |   Latest post: Wed, 8 Dec 2021, 9:14 AM


Daily technical highlights – (IOIPG, UZMA)

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IOI Properties Group Bhd (Trading Buy)

• After peaking at a high of RM1.77 in Dec 2020, the stock subsequently fell 39% to bottom out at RM1.08 in July this year. Since then, the stock has been forming higher highs and higher lows.

• Following a bounce-up from the recent low of RM1.18 last month, the stock is now on the cusp of resuming its upward trajectory.

• After treading below the 100-day SMA recently, yesterday’s convincing break out above the 100-day SMA is a signal that the stock’s uptrend is intact. The MACD and Parabolic SAR indicators also show that the stock is gaining positive momentum.

• An anticipated upward movement in the share price could challenge our resistance levels of RM1.44 (R1; 13% upside potential) and RM1.55 (R2; 21% upside potential).

• We have pegged our stop loss at RM1.13 (12% downside risk).

• Business-wise, IOIPG is involved in the: (i) development of residential, commercial and industrial properties, and (ii) investments in shopping malls, office complexes and other properties.

• In FY ended June 2021, IOIPG recorded a net profit of RM628m, down 3% YoY despite posting higher revenue of RM2.5b (+18% YoY), mainly due to weaker margins from the property development segment.

• Looking ahead, consensus is expecting IOIPG to achieve net profit of RM714m (+14% YoY) in FYE June 22 and RM753m (+5% YoY) in FYE June 23, translating to forward PERs of 9.9x and 9.4x, respectively.

• We believe that IOIPG – with a geographical presence in Malaysia, China and Singapore – is a beneficiary of post-pandemic economic recovery, riding on the resumption of home purchases to be fuelled by pent-up demand for properties.

Uzma Bhd (Trading Buy)

• UZMA is involved in the provision of oil and gas services in the areas of geoscience & reservoir engineering, drilling & operations and project management.

• In FYE June 2021, UZMA achieved a core net profit of RM21.7m, a 119% jump from the RM9.9m posted in FYE June 2020, driven by better cost management and higher operational efficiencies.

• Looking ahead, consensus is expecting UZMA to achieve a net profit of RM26m (+19% YoY) in FYE June 22 and RM33m (+27% YoY) in FYE June 23. These represent forward PERs of 8.6x and 6.8x, respectively.

• With Brent crude oil price currently hovering above USD80 per barrel, which may see further upside due to the reopening of international borders and resumption of air travel, the prevailing excitement in the oil & gas space will likely boost trading sentiment in UZMA shares.

• Technically speaking, after forming a double-bottom pattern (as the price tested RM0.55 twice in August and September), the stock could stage a reversal from the downtrend that began in March 2021.

• Four trading sessions ago, the formation of the bullish Marubozu candlestick has convincingly broke above the neckline of the double-bottom pattern, dismissing any fears of a lower high to mark the end of the downtrend. Together with the crossing above the 100-day SMA, the positive signals suggest that the stock could continue trending upwards.

• And with the Heikin Ashi candlesticks, MACD and Parabolic SAR indicators all showing signs of a strengthening momentum, we believe the stock will likely be on its way to challenge our resistance levels of RM0.775 (R1; 12% upside potential) and RM0.83 (R2; 19% upside potential).

• We have pegged our stop loss at RM0.62 (or an 11% downside risk).

Source: Kenanga Research - 15 Oct 2021

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Related Stocks

Chart Stock Name Last Change Volume 
IOIPG 1.06 -0.01 (0.93%) 126,100 
UZMA 0.45 +0.01 (2.27%) 908,700 

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