MYEG has tanked 46.5% to from the recent peak of RM1.42 (14-Feb-2020) to RM0.765 (19-Mar-2020). On Monday, MYEG commented that its Covid-19 rapid test kit has been qualified for emergency use by the US FDA, paving for the sale of the kit in the US. We view this positively and anticipate further rebound on the share price towards RM0.94-1.00, followed by a LT target of RM1.07. Support is located around RM0.81-0.83, with a cut loss point set around RM0.79.

MYEG’s Covid-19 rapid test kit approved by US FDA. According to the news on Monday, we noticed that MYEG’s test kit is approved in the US and had already been approved by health authorities in China and Europe, where they are already being used widely. It will be on sale with a price tag of RM99 (basic test kit) and RM149 (advanced test kit) this is definitely a solid catalyst for MYEG at least for 1HCY20. Currently, it is still pending for approval by the ministry of health (MoH).

Due for further rebound after a steep plunge. The stock has delinced more than 40% over the course of more than 4 weeks and we believe this is a decent range to accumulate and trade for a rebound. Indicators are recovering with the MACD Histogram turning green as well as both the RSI and Stochastic oscillators hooking upwards. We anticipate further rebound of the share price towards RM0.94-1.00, with a LT target of RM1.07. Support is set around RM0.81-0.83, with a cut loss level pegged around RM0.79.

Source: Hong Leong Investment Bank Research - 31 Mar 2020