HLIB Research maintains a BUY rating on FOCUSP with TP RM1.10 TP. After a 19.9% correction from the all-time high of RM0.98, FOCUSP’s risk-reward profile is attractive amid undemanding 15.7x FY22 PE (18% lower than industry), strong FY20- 23E EPS CAGR of 23%, and decent FY22-23 DY of 2.8%. Despite potential weakness in 2Q21 results amid the MCO/FMCO restrictions, we reckon FOCUSP will be able to brace through these challenging times with its relatively MCO-resilient business model, as we view optical sales as an essential rather than a discretionary purchase. Additionally, increasing F&B corporate sales and commencement of CK2 should see the profitability of the F&B division to expand further in 2HFY21 and beyond as vaccine rollouts picking up at an urgent pace.

Potential bullish triangle breakout. After plunging 33% from all-time high of RM0.98 to YTD low of RM0.655, FOCUSP has been trapped within the triangle consolidation mode. The recent hammer pattern and a strong close above lower BB yesterday could signal more upside ahead. A successful breakout above RM0.83 (downtrend line from RM0.98) would signal that a new up-leg has begun to retest RM0.92 (18 Mar high) and our LT target at RM0.98 levels. Supports are pegged at RM0.73 (23.6% FR) and RM0.72 levels. Cut loss at RM0.71.

Source: Hong Leong Investment Bank Research - 3 Jun 2021