A globally competitive MRO service provider. Destini (being a GLC linked company with MoF owning an effective 19.4% stake) is currently one of the leading maintenance, repair, overhaul (MRO) service providers in Malaysia focusing primarily on four segments i.e. aviation, marine, land transport (for both the defense and commercial sectors) and the O&G sectors. Its geographical footprint encompasses the Asian, Oceania, Middle East and European regions. At RM0.755, Destini is trading at 11.2x FY18 P/E (44% below its average 10-year P/E of 20x), supported by a robust 2016-2018 EPS CAGR of 54% and healthy orderbook over RM1.67bn (to last the group for 4 years).

Poised for a potential downtrend resistance breakout. After tumbling 33% from 52-week high of RM0.895 (14 Sep 16) to a low of RM0.60 (30 Dec 16), Destini’s share prices staged a relief rally to close at RM0.755 last Friday yesterday in high volume (+24% against 3M average).

Technically, its long-term uptrend channel remains intact and we believe the stock is ripe for a near term downtrend resistance breakout, as indicators are on the mend. A decisive breakout above downtrend line near may spur share prices higher towards RM0.825 (76.4% FR) before retesting our LT objective at RM0.895. On the flip side, key supports are situated at RM0.735 (3 Mar low) and RM0.71 (200-d SMA). Cut loss at RM0.70.

Source: Hong Leong Investment Bank Research - 6 Mar 2017