• Profile: MIECO (listed in 1998) commissioned its first production line in 1976, making it the pioneer in particleboard manufacturing in Malaysia using rubber wood, or now known as tropical oak wood. MIECO has three factories located in Semambu, Gebeng and Kechau Tui, Pahang with a combined capacity of more than 900,000 cubic meters pa.
• The group commands a dominant presence in the domestic market (over 50% market share), and is exporting to over 20 countries including China, Taiwan, Japan, Korea, Hong Kong, South East Asia, the Indian subcontinents, the Middle East, Africa, and the Australasian countries. Currently, MIECO is trading at 0.53x P/B agains t its peers s uch as HEVEA’s 1.21x and EVERGRN 0.79x.
• Positives triangle breakout. Since hitting a 52-week high of RM0.77 on 7 Apr, MIECO share prices corrected 21.4% to a low of RM0.605 on 16 June before trending higher to end at RM0.705 yesterday. Share prices had also closed above the ST resistance trend line as well as multiple key SMAs. With prices trading within the uptrend channel (based on weekly chart), we could see higher prices in near term, supported by positive daily and weekly oscillators.
• A decisive breakout above RM0.73 (22 Apr high) will spur prices to retake RM0.77 and RM0.80 (upper uptrend channel) levels before heading to our long term objective near RM0.87 (29 Mar 2011 high). Supports are pegged at RM0.675 (50-d SMA) and RM0.665 (10-d SMA). Cut loss below RM0.65.

Source: Hong Leong Investment Bank Research - 1 Jul 2015