DSONIC (5216-Main Market): Technology; ICT solutions

Management is optimistic of a better FY3/2024, capitalising on outstanding orderbook (estimated at RM300m) and surging demand particularly on the passport and Mykad projects as well as several pockets of growth under the memorandum of agreement with the Ministry of Urban Planning, Housing and Territorial Development of the Republic of Guinea.

The stock’s current below-mean valuation presents a good buying opportunity, supported by a decent FY3/2024E DY of 4.5%. Overall, current share price overhang will be lifted when it secures contract extensions on its existing solutions

Poised for a triangle breakout. A successful breakout above 0.45-0.46 immediate resistance could lift the stock higher towards 0.48-0.51 zones

✅Current price: RM0.445

✅Entry: RM0.425-0.435-0.445

✅Resistance: RM0.46-0.48-0.51

✅Cut loss: RM0.415

✅FY3/2024E P/E: 17.1x (vs 10Y avg 35x)

✅FY3/2024E DY: 4.5%

✅Risk profile: Medium

Source: Hong Leong Investment Bank Research - 17 Nov 2023