• Distributes 88 brands of electrical products and accessories, comprising of 85 third-party brands and remainder 3 brands of their own. Aims to open additional 7 new outlets that will ramp up the total number of outlets to 15 over the next 3 years by penetrating into second-tier cities across Peninsular Malaysia.

• Entered into a collaboration agreement with Prima Nexus Sdn Bhd (PNSB) to distribute rapid test kits for the detection of Covid-19 which have been approved by the Ministry of Health Malaysia (MOH). Technically, a short-term consolidation breakout above RM0.375 will boost price towards the next resistances at RM0.405-RM0.435 with long term target at RM0.47.

Trading Catalyst

• Aco Group Bhd (ACO) is involved in the distribution of electrical products and accessories that currently distributes 88 brands of electrical products and accessories, comprising of 85 third-party brands and remainder 3 brands of their own. Moving forward, ACO aims to open additional 7 new outlets that will ramp up the total number of sales outlets to 15 (from 8 currently), 4 distribution centres, 3 lighting concept stores, and a fleet of 20 trucks by FY22 and penetrate into second tier cities across Peninsular Malaysia to expand their reach.

• At the same, ACO has recently entered into a collaboration agreement with Prima Nexus Sdn Bhd (PNSB) to distribute rapid test kits for the detection of Covid-19 which have been approved by the Ministry of Health Malaysia (MOH). We view the move positively premised to the increasing demand for Covid-19 testing and detecting products for both individuals and businesses to ensure a safe living and operating environment.

Technical Outlook

• Technically, price as retraced towards the daily EMA120 level and is currently attempting to find a footing. We may observe for a short-term consolidation breakout above RM0.375 to target RM0.405-RM0.435 with long term target at RM0.47. Support is pegged at RM0.35 and cut loss is located at RM0.345.

Source: Mplus Research - 5 Oct 2020