• Negatives news likely discounted. BRAHIMS share prices nosedived 43% from YTD high of RM1.42 (21 Jan) to a low of RM0.81 on 5 Mar before ending at RM0.845 yesterday. The selldown was mainly attributed to disappointing 4Q14 results and inves tors ’ concerns due to uncertainties arising from the extended negotiations with MAS for a new catering agreement (by 30 Apr) and its proposal to acquire a local food-and-beverage company.

• Undemanding valuation. At RM0.845, BRAHIMS is trading at 0.81x P/B, 24% below its 10-year his torical average P/B of 1.07x and 67% below its clos es t peer’s SATS P/B of 2.49x. We think such steep discounts would have provided a sufficient margin of safety and cushion further share price decline.
• Accumulate as values emerge. BRAHIMS is grossly oversold after recent slump in share price. Currently, BRAHIMS is building its base along the daily upper Bollinger band near RM0.825 and RM0.80 zones.
• Immediate resistance levels are RM0.865 (daily mid Bollinger band) and RM0.895 (3 Apr high). A decisive breakout above RM0.895 could provide further impetus for share prices to retest our long term objective of RM0.95 (23.6% FR).
• Cut loss below RM0.79.

Source: Hong Leong Investment Bank Research - 9 Apr 2015