EKOVEST: Back to support

Back to grossly oversold levels. Following our successful technical calls on EKOVEST dated 7 March (report), the stock has retraced back to our previous entry price amid sluggish market sentiment. In light of this, we advocate traders accumulate on weakness in anticipation of a potential oversold rebound. Technically, EKOVEST is presently trading within its long-term support zone of RM0.43-0.46 with grossly oversold indicators. A rebound above RM0.46 is expected to propel the price towards the RM0.48-0.52 range. Furthermore, a breakout above the RM0.52 resistance level will establish a double bottom pattern, potentially leading to a further rally towards RM0.54-0.55 levels. Cut loss at RM0.39.

Monetization of DUKE Phase 1 and Phase 2. EKOVEST's strategic plan to monetize DUKE Phase 1 and Phase 2 is considered a potent driver for the group's share price. These assets hold substantial value (possibly doubling its current market capitalization), as the projected disposal gains from these assets could reach RM2-3bn based on consensus estimates.

Construction segment. The construction segment of EKOVEST recorded a 5% YoY increase in 1QFY24, primarily driven by higher contributions from the completion of the SPE highway. This upward trajectory is anticipated to persist, fuelled by the acceleration of progress billings for the Johor Baharu-Singapore Rapid Transit System Link (RTS) project. Furthermore, EKOVEST's tender book currently stands at RM4.7bn, encompassing projects such as the KL Bund and the Istana Link of DUKE Phase 2A.

Collection range: RM RM0.43-0.44-0.45

Upside targets: RM0.48-0.52-0.55

Cut loss: RM0.39