Being an established integrated SCADA system solutions provider, Willow expects positive growth in the infrastructure, healthcare, public safety and plantation industries, underpinned by its active tenterbook of ~RM1bn (success bid rate is about 20%). Valuation is undemanding at trailing 13.5x P/E (vs peers’ 37x), supported by a strong orderbook about RM300m (which can last for 2-3 years), solid NCPS of 14.5sen (30% of share prices), and decent DY of 3% (68% higher than peers).

Poised for bullish rounding bottom formation. We see a rounding bottom pattern taking place soon, suggesting that the next leg up is currently underway. A successful breakout above the RM0.50 neckline resistance could potentially spur prices higher towards RM0.52 (26 Feb high) and RM0.555 (4 Aug high) before advancing further towards LT objective at RM0.585 (10 Feb high). Supports are pegged at RM0.46 (10D SMA) and RM0.45 (200D SMA). Cut loss at RM0.44.

Source: Hong Leong Investment Bank Research - 22 Mar 2021