• Adapting to new strategy to generate higher revenue and profits. Bahvest is currently involved in the aquaculture business and has recently chalked up positive results for two consecutive quarters as it adopted the strategy to rear part of its cross-breed fishes to larger, preferably above 6kgs before selling them. Also, with this fast growing cross-breed species, it is expected to have fast and significant growth once they reach a body weight of about 2kgs.
   
• Diversifying into mining business. Besides the aquaculture business, Bahvest is buying into a dormant company, Wullersdorf Resources Sdn Bhd for RM131 mln, which eventually plans to venture into mining business. Based on the recent announcement, the deal is likely to be completed before 18th May 2017.
   
• 3Q results to be announced in February. With the new strategy in hand, we anticipate that the 3Q results to be positive. Also, if the abovementioned deal is going through before the planned date, it may create excitement for the share price approaching the announcement.
   
• Trendline breakout with increased volumes. Bahvest has breached above the trendline of RM1.00 with higher trading volumes, indicating that the buying momentum should be able to sustain for another round of rally. Risk-averse traders may accumulation the pullback around RM0.975- RM1.00 with the upside target envisaged around RM1.09 and RM1.18. Meanwhile, support will be pegged around RM0.945. Cut loss will be set around RM0.93.

Source: Hong Leong Investment Bank Research - 12 Jan 2017