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Technical Tracker - HLIB Retail Research –18 Apr 2024

HLInvest
Publish date: Thu, 18 Apr 2024, 10:02 AM
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This blog publishes research reports from Hong Leong Investment Bank

CLOUDPT: Set for rebound?

Riding on the impending passage of cybersecurity bill. The cybersecurity bill, which was passed in the Dewan Rakyat on 3 Apr is now slated for its third reading. Aiming to bolster national cybersecurity and safeguard Malaysia’s digital infrastructure against cyber threats, the bill establishes cybersecurity standards that organizations classified as National Critical Information Infrastructure (NCII) must adhere to. These NCII sectors encompass government, national defence and security, banking and finance, information and communications, energy, transportation, emergency services, water, health services, agriculture and plantations, and trade, industry, and economy. Failure to comply with these cybersecurity standards will result in fines and potential imprisonment for company directors. Given this regulatory landscape, CLOUDPT is well positioned to capitalize the burgeoning demand for cybersecurity solutions post-passage of the bill. CLOUDPT offers a comprehensive range of solutions that can be deployed independently or integrated seamlessly with other existing systems, leveraging on its well-established network of technology vendors such as CISCO, McAfee, Paloalto and others.

Acquiring Unique Central Group. In Feb 2024, CLOUDPT finalized a term sheet to acquire a 75% stake in Unique Central Group (UCG) for a consideration of RM26.8m. UCG specializes in data centre infrastructure services, covering design, construction, integration, monitoring, and sustainability assessment. Its client base includes hyper-scale data centre providers, telecommunication firms, financial institutions, large enterprises, and government agencies. We view this acquisition positively as it positions CLOUDPT to capitalize on the growing demand for power in the data centre sector. Moreover, the acquisition is expected to bolster the group's earnings, with profit guarantees of RM4.2m, RM4.8m, and RM5.2m for FY24 through FY26, respectively.

Set for rebound? The formation of a bullish tail bar on 16 April, subsequent to touching the support region of RM0.55-0.56 (MA100), indicates a potential rebound is underway, provided there is no decisive breakdown below the mentioned support. A successful breakout above RM0.65 is poised to drive the price towards the levels of RM0.68-0.70-0.73. Cut loss at RM0.53.

Collection range: RM0.57-0.59-0.60

Upside targets: RM0.68-0.70-0.73

Cut loss: RM0.53

Source: Hong Leong Investment Bank Research - 18 Apr 2024

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