Potentially Super Growth in 2021

Welcome back to “The Huat Project”. Today we would like to emphasize on a stock which Potentially Super Growth in 2021 - SCOMNET (0001).

While many have already lose steam the COVID-19 Theme, or the Healthcare Sector, We would like to present SCOMNET(0001), as they are ready to experience exponential growth in 2021 despite being “related” to the Healthcare sector. 

From our understanding, SCOMNET(0001) is actually a TECHNOLOGY company, who manufactures high-end tech for medical industry, “An Industry-Leading Automated Medical Manufacturer”.

Analyst Opinion:

RAKUTEN analyst Vincent says its a “buy” with target price of RM2.68

UOB Kay Hian analyst says its a “buy” with target price of RM2.40

SCOMNET(0001) is also the top stock pick for 2021 as per The Star reported. 

https://www.thestar.com.my/business/business-news/2021/01/02/stock-picks-for-2021 

Fundamental Analysis

SCOMNET(0001) main customers are USA based Edward Lifescience, Denmark based Ambu & Mermaid Medical which are well known medical leaders in the industry.

SCOMNET(0001) is a net cash company with 56mil in their balance sheet, and ZERO borrowings.

Analysts estimate an averagely of RM30mil for FY20, and the quarter results should be released before end of February. If previous 3 quarter hey did about RM16mil, what will happen to stock price if a sudden surge of profit to RM14mil for the forth quarter ? again this is based on the analyst estimate of RM30mil for FY20. For FY21, Rakuten Analyst estimates profit of RM50.5mil, well isnt that almost double of FY20?

Will stock price double as well? We do not know but we know that SCOMNET (0001) is well positioned for a exponential growth in 2021

Technical Analysis:

SCOMNET(0001) will most likely break out from the interim resistance for RM2.16 to retest its previous high of RM2.38. With RM2.00 as support, the Reward to Risk Ratio is about 4 times.

Conclusion:

We strongly believe that SCOMNET(0001) is ready to experience a SUPER GROWTH in 2021. With the FY20 earning estimates of RM30mil, and previous 3 quarters done about total of RM16mil, will the coming 4th quarter results be RM14mil? If RM14mil we believe the stock price will sky rocket to new high uncharted areas.

The forth quarterly financial results should be released before end of February.

What will you do ? 

DISCLAIMER: This post serves as an educational analysis and is never meant to be a buy/sell call or recommendation. Investors must always do their own due diligence before making any investment decisions. The author of this post is not liable in any way for any decisions made by any individual.