• Company profile. Datasonic (DSONIC) is the pioneer involved in provision of ICT solutions including smart card personalization (secure ID or chip-based / debit / bank cards). Currently, DSONIC is the only supplier of MyKad, ATM chip-based smart card or BankCard and chip-based credit cards (Europay, MasterCard and Visa Cards).

• More contracts on passports. In March, DSONIC has secured additional RM79.7m contract to their current RM284.7m 5-year supply of polycarbonate datapage and personalization services to the immigration department, which boosted the total contract value to RM364.4m.

• MyKad orders increased and looking for new avenues. DSONIC received an order of 1 million units each for the MyKad and MyKad consumables in previous quarter. Hence, we may anticipate an improvement in next quarter’s results. Also, DSONIC could be looking into new revenue streams from providing driving license and road tax stickers.

• Technical outlook. DSONIC has experienced an inverted head and shoulders formation above the neckline of RM1.30 with improved volumes. Trading interest may pick up towards RM1.36-RM1.40, with an inverted head and shoulders projection upside projection around RM1.48. Support will be located around RM1.23-1.25, while cut loss is at RM1.20.

Source: Hong Leong Investment Bank Research - 7 Apr 2017