• A leading MRO service provider. Destini is an integrated engineering solutions provider with diverse interest in the aviation, marine, land transport as well as ensuring safety and survival equipment efficiency in these industries, the Group excels in being one of the leading maintenance, repair and overhaul (MRO) service provider, covering the Asian, Australian, Middle East and European regions. In FY16, the marine division contributed 55% to the revenue, while the rest were from aviation (30%), O&G (10%) and land & transport (5%).

• Potential politically linked and election proxy. Destini is viewed as a politically linked company as its single largest shareholder is Dato’ Rozabil Abdul Rahman (Group MD) with a 25% stake. Moreover, the businessman is reportedly the UMNO Perlis treasurer. Meanwhile, Ministry of Finance has a 17% stake via its wholly owned subsidiary, Aroma Teraju.

• Potential sideways breakout. Since the recovery of share prices from the RM0.42 level, it has been hovering sideways between RM0.56-0.67 over the past two months. Currently, Destini is hovering above the SMA200 (LT moving average). With the MACD Indicator trending higher above the zero level and the recovering RSI and Stochastics oscillators, we believe that Destini could poise for a breakout over the near term. Should the price surge above RM0.64, next resistance will be envisaged around RM0.68-0.70, followed by a LT target of RM0.76. Support will be anchored around RM0.60-0.61, with a cut loss point set at RM0.59.

Source: Hong Leong Investment Bank Research - 26 Feb 2018