SYSTECH - WILL HISTORY REPEAT ITSELF IN THIS TECH STOCK ??!

Hello to all readers out there. Recently NASDAQ in the USA has been rallying to new highs. Therefore, all TECH stocks should be looked at closely for potential to rally up to recent highs.

Having said the above, the stock which I'd like to talk about today is SYSTECH BERHAD (SYSTECH - Stock Code 0050, ACE Market, TECHNOLOGY-Software)

BASIC INFORMATION ABOUT SYSTECH

SYSTECH was listed in BSKL in 2011 with core businesses in a few fields:

i) e-business solutions

ii) Cyber Security

iii) e-logistics

Market Capitalization : RM 76.5 million

Shares Float : 347.71 million

Website : https://www.systech.asia/

1. EXCITING PROSPECTS AHEAD FOR SYSTECH TO CAPTURE MARKET SHARE

Refer latest annual report of SYSTECH. The following strategies taken by SYSTECH to improve its revenue in future:

i. Continue to expand penetration for its cyber security monitoring services, cyber security professional services as well as its training services within the local market

ii. Further innovating the Group’s “1Cliq” eMRM (online Members Relationship Management) and eFRAME (e-Franchise Management Enterprise) solutions with the latest technology and market trend in the members’ centric industry. The Group will be launching two new solutions in the coming year – eSyshop and eMRM Lite, targeting the growing e-commerce segment;

iii. Continuing its development of the digitised annual reports platform by undertaking further research and development on secured and authenticated delivery of documents; and

iv. Continue to innovate and identify new solutions and services as well as undertaking research and development of new application solutions particularly in the e-commerce segment.

2. LOW PUBLIC FLOAT - TOP 30 SHAREHOLDERS HOLDING 73.68%

SYSTEC Refer below list of latest shareholdings for SYSTECH as of latest annual report. The biggest shareholder is LEINET TECHNOLOGY BERHAD with 52.25%. 

Also the top 30 shareholders in this company are holding 73.68% of the total float, and in the news recently, there has not been any change in major shareholdings.

This means that the total effective float in the public is about 26%. This allows the price to trend higher with less resistance of sellers in place.

3. TECHNICAL ANALYSIS - BREAKOUT 3 YEAR DOWNTREND LINE WITH

STRONG VOLUME

Refer below the basic price and volume chart with key EMAs for SYSTECH monthly chart :

A few observations on the monthly chart:

i. Refer Circle 1, 2 and 3, SYSTECH previously hit its resistance area between 36 - 45 cents before making its way downtrend again towards its base price

ii. Refer 4, where recently big volumes started entering this counter

iii. Refer Circle 5, recently SYSTECH broke its 3 year downtrend and is now on an uptrend pattern

iv. Will history repeat itself for this stock to test blue resistance area and break out above it ??? Only time will tell. I will be closely monitoring it

CONCLUSION

Considering all the above, I opine that current price for SYSTECH is attractive due to below:

i) NASDAQ making new high, therefore all TECH stocks to be given attention

ii) Exciting prospects ahead for SYSTECH based on its strategies undertaken to improve market share

iii) Low public float which allows price to trend higher with less resistance

iv) Broke 3 year downtrend, with significant volumes entering. Possible to test blue resistance area of around 36-45 cents before breaking out above to confirm triple bottom pattern breakout

LET’S SEE HOW THE SHARE PRICE MOVEMENT IN THE NEAR FUTURE FORBEARING ANY GOOD CORPORATE NEWS.

Disclaimer : The above opinion is never intended to be a BUY CALL whatsoever. I am sharing my observations ONLY based on fundamental; past history; current trading pattern; charts etc. Please make your own informed decision before buying this share or whatever share for that matter.

BURSAMASTER