• Founded in 1988, Chin Well is one of the largest fastener manufacturers in the world, with production facilities in Penang, Malaysia; and Nhon Trach District, Vietnam. Chin Well manufactures a comprehensive range of screws, nuts and bolts, which it supplies to global customers in various industries including power, land infrastructure and Do-It-Yourself (DIY) sectors. Chin Well has established strong distribution networks in the domestic and international markets, with its fasteners exported to Europe and South East Asia.
• The stock is extremely oversold following a plunge in share price from high of RM2.34 on 7 Jan 2016 to RM1.60 (near daily FR level of 61.8% and weekly FR level of 50%). We expect share price to gain buying momentum in the near term as two bullish revers al patterns , ‘Morning Hammer Star” and “Hammer” patterns on daily and weekly chart respectively, have triggered a reversal sign.
• As such, we are targeting RM1.82 (daily 50% FR), RM1.94 (daily 38.2% FR) and RM2.09 (daily 23.6% FR). Supports are pegged at RM1.69 (daily 61.8% FR) and RM1.63 (200-d SMA), with cut loss at RM1.60.
• Attractive risk to reward ratio with 21% upside against 7% downside. We see a good risk to reward ratio for investor with a theoretical entry price of RM1.72 given that the downside to the cut loss zone of RM1.60 is 12 sen (-7%) while the upside to the LT target of RM2.09 is 37 sen (+21%).

Source: Hong Leong Investment Bank Research - 10 Mar 2016