• Business profile. AWC Berhad is the premier provider of total asset management and provides "one stop" integrated facilities management services to building facilities owners. The Company is the only IFM provider in Malaysia with nationwide coverage. The group’s automated was te collection s ys tem is als o a big part of its businesses; they are one of the top 3 companies in the world offering this service. These services contribute about 80% - 90% of its revenue.
• Undemanding valuation. After reaching recent high of RM0.495 on 13 Apr 2015, share price retraced 28% to the low of RM0.355 yesterday, in tandem with the broader market retracement. At RM0.365, AWC is currently trading at cheaper valuation of 7x trailing PE which is about 43% and 29% discount to its 5-yr and 10- yr average historical PE of 10x and 9x respectively. Apart from that, the group is also trading at discount to its net assets per share of 38 sen and has net cash per share of 26 sen.
• Big potential market. The major current trends in the facilities management industry is a very nascent industry. Many organizations are still not familiar with facilities management, which provides an opportunity for AWC to educate. Many buildings are 30 – 40 years old but as they grow older, the need to care and upkeep these buildings will raise and we think that’s when the indus try will pick up.
• On technical outlook, share price is expected to resume buying momentum as: (1) the stock is grossly oversold, substantiated by daily MACD, RSI and Slow Stochastics; (2) price is well cushioned by daily 61.8% FR level (RM0.355); and (3) reading from hourly oscillators showed buy signals, which are triggered by Goldencross MACD and the crossing of RSI & Slow Stochastics above 30% & 20% respectively.
• Further upside targets are at RM0.38 (50% FR) and RM0.40 (gap on 21 & 22 May 15), with a long term objective of RM0.43 (Upper-Bollinger band). Conversely, immediate supports are pegged at RM0.355 (61.8% FR) and RM0.35 (gap on 12 & 13 Mar 15 and 200-d SMA). Cut loss below RM0.34.

Source: Hong Leong Investment Bank Research - 27 May 2015