• Business profile: ASTINO (listed in July 2003) is involved in manufacturing and selling of metal roof sheets, polyvinyl chloride (PVC) panel, Polyvinyl chloride (PVC) products and Agrohouse multi-system (advanced economical and environmental friendly solution to the construction of various types of poultry house in the modern poultry industry).
• Undemanding valuations. At RM0.765, ASTINO is trading at 7.2x FY14 P/E, and 26% below its BVPS of RM1.03. Despite more superior average FY11-14 net profit margin of 6.5% (AJIYA: 5.3%) and dividend yield of 4.0% (AJIYA: 1.4%), ASTINO is still trading at 12% discount to its closes t peer, AJIYA’s P/E of 8.2x. Hence, we believe there is room for further rerating as ASTINO’s share prices play catch-up.
• Bottoming up. Based on weekly chart, ASTINO prices have been trending within the LT uptrend channel since the RM0.35 low in Mar 2013. Since staging a downtrend line breakout in late March 2015, share prices have been steadily trending higher. ASTINO’s s hare prices rallied 4.8% yes terday to R M0.765 with 552k shares transacted, 411% higher against 3M average of 108k shares and 470% higher than 6M average of 97k shares, respectively.
• We believe the 32.6% correction from 52-week of RM0.95 high (19 Aug 14) to a low of RM0.64 (7 Dec 14) could be at the tail end following the relief rally back above RM0.715 (23.6% FR).
• As technicals are on the mend coupled with the double bottom formation and rising volume, the rebound could continue. A decisive breakout above immediate resistance of RM0.785 (2 Apr high) will lift prices higher towards RM0.83 (61.8%FR) and our LT price objective of RM0.87 (or 76.4% FR).
• Supports are near RM0.725 (50-d SMA) and RM0.715. Cut loss at RM0.695.

Source: Hong Leong Investment Bank Research - 14 Apr 2015