• TNLOGIS is one of our top small cap picks with a RM2.07 target price or 24.7% upside. We opine that the recent 5.7% share price retracement from 52-week high of RM1.76 (1 Nov) offers opportunity for LT investors to accumulate. We like TNLOGIS owing to its logistics and warehousing division that will continue to anchor the group’s growth in the coming years with e-commerce and resilient increase in B2B trade volume.
   
• Meanwhile, the potential REIT listing of warehouse assets (likely in 2Q17) will bring about an asset rerating. While admittedly outlook of the property market is still subdued, the group still owns undeveloped landbank with the size of 152.7 acres (potential GDV of circa RM1.5bn), an upside catalyst as we have yet to account for the potential new launches. Moreover, the focus of TNSLOGIC is on industrial property development which is more resilient amid current subdued property market.
   
• Pending a downtrend line breakout. After staging a symmetrical triangle breakout on 26 Oct, share prices climbed to a high of RM1.76 (4.5% below the breakout target of RM1.84) before closing at RM1.66 yesterday on profit taking. Despite unsuccessful in its 1st attempt, TNLOGIS is poised for resumption of uptrend to march further towards RM1.84 territory again after a brief sideways consolidation if share price is able to close above 100-d SMA.? A decisive close above immediate resistance at RM1.70 (downtrend line and 50% FR) will spur prices higher to RM1.76 and RM1.84. Our LT objective is RM1.96 (261.8% FR). Conversely, key supports are situated at RM1.62 (100-d SMA) and RM1.57 levels (14 Sep low). Cut loss at RM1.56.

Source: Hong Leong Investment Bank Research - 16 Nov 2016