From up to down. Listed in 2000, TAWIN is principally involved in manufacturing and selling copper rods, and subsequently ventured into higher-margin downstream business by setting up Cyprium Wire Technology (CWT) and acquiring Sin Li Tek to produce automotive and E&E cable. In 2021, CWT was certified by the International Automotive Task Force (IATF) – a crucial certification to venture into the automotive supply chain – and subsequently appointed as a vendor for Aptiv PLC's global automotive supply chain. Note that Aptiv is the top 5 largest automobile wire harness player globally and listed on the NYSE with a market cap of USD28.7bn.

Electron beam cross linked wire - a new beginning with a promising outlook. After undergoing the re-organization process since 2018, TAWIN had finally turned into black and registered a core net profit of RM4.6m in 2QFY22, thanks to the better performance in its copper rod business coupled with the contribution from CWT and Sin Li Tek. Going forward, we expect stronger performance in the ensuing quarters, premised on the optimism from the new capacity (additional 1.5k MT/month in copper rod division and 2 lines in CWT by 4QFY22) and the contribution from POSCO International, South Korea’s largest trading company (secured in 2021 to supply ~65k tons of copper rods and wires over 3 years) starting from 3QFY22 that will significantly drive the group's bottom-line.

While TAWIN only produces regular cable for the automotive, O&G and E&E industry now, the commencement of its Electron Beam Irradiation plant in 4QFY22 will be a game-changer as it will allow CWT to produce patented electron beam cross linked wire – a cable that is widely used in EV – which commands a higher profit margin than their current products (15-20% profit margin in regular car cable versus 35-50% in electron beam cross linked wire). Upon completion, CWT will be the exclusive player in Malaysia that can produce such wires.

Uptrend remains intact. After sliding 33% from an all-time high of RM0.195 to RM0.13 (below its uptrend trend channel), TAWIN staged a strong rebound to end at RM0.15 last Friday, a tad above the support trend line from RM0.145. In the wake of the rising indicators and higher low patterns, a decisive breakout above RM0.15 may spur the price toward RM 0.17-0.19-0.20 zones. Cut loss at RM 0.125.

Source: Hong Leong Investment Bank Research - 14 Mar 2022