• One of the largest trophy manufacturers in the world. EMICO is principally involved in the manufacturing of trophies and souvenirs for sporting events such as the FIFA World Cup, the Commonwealth Games, the Southeast Asian Games and Sukan Malaysia.
• EMICO is also involved in OEM contract manufacturing of consumer and children products, toy parts and industrial parts plastic products supplier, as well as trading of household products. The group exports its products to more than 40 countries worldwide and has a strong network of covering a wide geographic sourcing area in Asian and Europe countries. This division contributed about 30% to 1HFY16 PBT.
• A niche property player in Kedah. Besides, EMICO is engaged in property development of residential and commercial building i.e. Bandar Mutiara, Sungai Petani and Taman Simfoni, Langkawi. This division contributed about 70% to 1HFY16 PBT.
• Ripe for a technical rebound. After hitting 52-week high of RM0.46 on 21 Dec, share prices tumbled 28% to a low of RM0.33 (4 & 5 Jan) before closing at RM0.345 yesterday, still above the short term 20-d/30-d/50-d SMAs. The downtrend line breakout and bottom-up indicators in hourly chart coupled with the small white body pattern in the daily chart could see prices advance further. Both daily MACD (above 0 mark) and RSI (above 50%) maintained their positive stance while slow stochastic indicators remain flattish.
• Key supports are RM0.33 and RM0.32 (100-h SMA). As long as these supports hold, we believe that a rebound is very likely take place. A decisive breakout above RM0.36 (38.2% FR) is likely to spur prices higher towards the RM0.395 (23.6% FR) and our long term objective of RM0.425 levels. Cut loss at RM0.305.
• Attractive risk to reward ratio with 23.2% upside against 11.6% downside. All in, we see a good risk to reward ratio for investor with a theoretical entry price of RM0.345 given that the downside to the cut loss zone of RM0.305 is 4 sen (-11.6%) while the upside to the LT target of RM0.425 is 8 sen (+23.2%).

Source: Hong Leong Investment Bank Research - 6 Jan 2016