• An established automated test and handling equipment manufacturer with diversified exposures to various sectors such as semiconductor industry (contributed about 80% to FY13 revenue but will gradually reduce to 70% in FY15- 16), rubber gloves, medicals, food, wireless, smart devices and the Internet of Things, automotive etc.
• Management guided a strong 4Q14 results (to be released in 3rd week of Feb) with topline and bottom line to increase double digit Q-Q due to increased orderbook and acceleration in delivery of order backlog amid bright semiconductor outlook, diversification in new customers and product offerings such as the automotive and general lighting industries.
• PENTA is also a beneficiary of the stronger US$ against the RM as >90% of its revenue is denoted in US$ against majority of its COGS are denominated in RM, according to management.
• A decisive breakout above RM0.45 will spur prices to retest 52-week high of RM0.48. PENTA share prices tumbled 34% from a high of RM0.48 (23 Sep) to a low of RM0.315 (16 Oct) before consolidating upward to end at RM0.435 yesterday.
• PENTA is poised to surpass uptrend resistance near RM0.45 (downtrend line) soon as prices are trending up along the uptrend line from RM0.34 (15 & 16 Dec low) as well as above 20-d/30-d/50-d/100-d/200-d SMAs, suggesting that momentum is still with the bulls . However, weakening technical readings may witness share price to continue to trend sideways in the near term before resuming its uptrend later.
• A decisive breakout above RM0.45 will spur prices to RM0.48 (52-week high) before heading towards RM0.50 psychological barrier and RM0.565 (76.4% FR) territory. Key supports are RM0.415 (13 & 29 Jan intraday low), RM0.40 (50% daily FR and 30-d & 100-d SMA). Cut loss at RM0.39.

Source: Hong Leong Investment Bank Research - 30 Jan 2015