A good proxy for the market with decent DY. HLIB Research maintains a BUY rating with TP of RM11.45 (30.5x on mid FY21 EPS), supported by undemanding 25.5x FY21 PE (17% lower than peers), strong netcash of RM270m (or RM0.33./share) and decent DY of 3.6%. With signs of institutional funds returning to participate more actively in the market (44.8% Nov to date vs Oct’s 45.7%) and active average retail participation (40.3% Nov to date vs Oct’s 40%) coupled with slower foreign outflows (-RM23.4m Nov to date vs Oct’s –RM31.9m), the stock is likely to trend higher following the positive triangle breakout.

BURSA daily: Positive triangle breakout

Positive triangle breakout. After tumbling 29% from a 52-week low of RM10.98 (28 July) to a low of RM7.80 (2 Nov), BURSA had staged a relief rally to end at RM8.59 yesterday, marginally higher than the downtrend line from RM10.98. Following the triangle breakout and positive indicators, we expect the stock to recapture the RM8.83 (100D SMA) overhead resistance levels soon. A successful breakout will send share price higher towards RM9.38 (50% FR) and our LT objective at RM9.77 (61.8% FR). Supports are pegged at RM8.42 (30W SMA) and RM8.10 (support trend line). Cut loss at RM8.05.

Source: Hong Leong Investment Bank Research - 17 Nov 2020