SMTRACK - THIS STOCK SEEMS "ON TRACK" TO MAKE A HOME RUN !!!

Hello to all readers out there. In the recent week, NASDAQ index had made a healthy correction, indicating opportunities of buying in TECHNOLOGY sector. 

Having said the above, the stock which I'd like to talk about today is SMTRACK BERHAD (SMTRACK - Stock Code 0169, ACE Market, TECHNOLOGY)

BASIC INFORMATION ABOUT SMTRACK

SMTRACK was incorporated in Jan 2004, and listed in BSKL on June 2008,  with core businesses in a few fields:

i) RFID solutions for various applications

ii) Logistics provider 

iii) Vessel fuel intelligent tracking system

Market Capitalization : RM 72.35 million

Shares Float : 229.7 million

Website : http://www.smtrackberhad.my/

1. CHARISMATIC EXECUTIVE DIRECTOR WHO ALSO SITS ON 3

DIFFERENT BOARDS OF PUBLIC LISTED COMPANIES

Below is the profile of SMTRACK Executive Director, Datuk Tan Choon Hwa :

Datuk Tan Choon Hwa (JP, JMK) is a businessman with (22) years of experiences in various industries such as Timber, Mining, Hotel Resort, Housing, Land Development and Finance Investment Holding.

He is the Executive Chairman of TCH Resources Group. He holds Directorships in Wazlian Group, he also holds other chairmanship in several association included President Malaysia-China Chamber of Commerce (Kelantan Branch) and Centre Committee etc. He is the advisor to Asean China Chamber of Commerce and adviser to China Sino Great Wall Group (listed on China Shenzheng Main Market).

He is presently sit on the board of directors of Ni Hsin Resources Berhad, APFT Berhad and MGB Berhad.

Based on his vast experience in multiple industries, I believe he will be playing a significant role in enhancing shareholders value for SMTRACK. As of the latest announcements in BURSA, he holds a 17.8 million stake in SMTRACK (7.7%).

2. ENTRY OF NEW MAJOR SHAREHOLDER (10.2% STAKE) - LIM

SHIOU GHAY (CURRENTLY CHAIRMAN OF ACME BERHAD) - ADDED

VALUE TO SHAREHOLDERS

Refer below notice of entry of substantial shareholder on 11 August 2020 where the price of the stock had surged to 58c year high. Mr Lim Shiou Gay, who is currently Director of ACME Berhad (Stock Code 7131, Main Market, Property Sector), had bought a substantial stake of 23.4 million shares (10.2%) in SMTRACK.

Since he entered SMTRACK thru Private Placement, therefore under normal circumstances, this would signal him as a friendly party to the existing management. Therefore, it would be interesting to find out in the near future, what SMTRACK has planned to improve and expand its business with the addition of this new major shareholder.

Brief profile of Mr Lim Shiou Ghay (taken from ACME Berhad Annual Report):

3. TECHNICAL ANALYSIS - BUY IN SUPPORT ZONE, PENDING BREAKOUT OF

FLAG PATTERN TOWARDS R1 AND R2

Refer below the basic price and volume chart with key EMAs for SMTRACK daily chart :

A few observations on the daily chart:

i. Refer Circle 1, 2 & 3, it seems that there is very strong support at the region between 28-32 cents, therefore defining this area as a SUPPORT buying zone

ii. Overall SMTRACK is forming a bullish flag consolidation pattern, at which point is pending to breakout towards the R1 zone (40 - 42 cents) and further towards R2 (56 - 57 cents) before making new all time highs

iii. Refer Circle 4, 5 & 6, it seems that buying volumes in this stock are far greater compared to its selling volumes

CONCLUSION

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

i) Charismatic Director Datuk Tan Choon Hwa who also sits on 3 different public listed companies

ii) Entry of major shareholder Mr Lim Shiou Ghay (10.2% stake) who is currently Chairman of ACME Berhad (Listed Property Stock), value added to SMTRACK shareholders

iii) Chart showing a consolidation within the bull flag pattern, pending a breakout above resistance towards R1 and R2 (Recent High & also 52-WEEK HIGH)

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