• A reputable integrated logistics service provider in East Malaysia. HARBOUR provides a full range of logistics services, including land transportation, freight forwarding, warehousing and also equipment leasing and rental services predominantly in East Malaysia. Other business activities include shipping and marine services, heavy lifting & heavy haulage works, engineering and construction works, and property development (a RM500m mixed development s cheme, named “Kidurong Gateway”, located at prime location of Kidurong Industrial Area). In 9MFY16, the property division contributed about 50% to 9MFY16 PBT, followed by integrated logistics (39%), engineering works (17%) and shipping marine services & others (-7.5.%).

• After the ex-date of 29 Mar of HARBOUR’s proposed bonus issue, proposed share split and proposed bonus warrants, share prices had corrected 31% from a high of RM1.27 (29 Mar) to a low of RM0.88 (28 Jun) before closing at RM1.00 last Friday. Currently, HARBOUR is trading at 5.7x trailing P/E, about 41% discount against its peers.

• LT positive following a bullish flag breakout. After a bullish flag breakout on 10 Aug, share prices jumped as high as RM1.04 last Friday before easing at RM1.00. With share prices are still trading above the 30-d/50-d SMAs, we are optimistic of a resumption of uptrend after undergoing a brief sideways pattern . MACD is on the verge of confirming its golden cross formation while slow stochastic indicators are hooking up. Key upside targets are RM1.04 and RM1.09 (100-d SMA).

• A decisive breakout above RM1.09 will spur prices higher towards LT target at RM1.15 (25 July high). Meanwhile, key supports are RM0.975 (50-d SMA) and RM0.95 (8 Aug low). Cut loss at RM0.93.

Source: Hong Leong Investment Bank Research - 15 Aug 2016