Cypark Resources Bhd (Trading Buy)

• CYPARK – which is engaged in the integrated renewable energy, green technology, environmental engineering and construction engineering businesses – is a proxy to the rising demand for green and sustainable energy solutions.
• On the chart, the stock has recovered from a low of RM0.61 on 19 March this year to close at RM1.01 yesterday.
• Currently trending within a positive sloping channel, CYPARK’s share price is expected to climb further to test our resistance thresholds of RM1.15 (R1) and RM1.25 (R2). This represents potential upsides of 14% and 24%, respectively.
• Our stop loss level is pegged at RM0.92 (or 9% downside risk).
• The Group posted a net profit of RM18.5m (-4.3% YoY) in 2QFY20, bringing its 1HFY20 earnings to RM33.1m (+2.2% YoY). Based on consensus full-year net profit estimate of RM80.6m, CYPARK is currently trading at an undemanding forward PER of 5.8x or almost 2SD below its 3-year historical mean.

Solarvest Holdings Bhd (Trading Buy)

• SLVEST – which is principally a solar EPCC contractor specialising in solar photovoltaic (PV) systems – is in a position to tap on the fast-growing solar PV industry in Malaysia, as total solar PV installed capacity is targeted to increase from 438MW in 2018 to 3,322MW by 2023.
• On the chart, the stock has tested and subsequently bounced off from an upward sloping trendline earlier this week.
• And following yesterday’s 4.4% share price gain to close at RM1.41 amid heavy trading interest, the stock could be resuming its upward trajectory as SLVEST makes its way towards our resistance levels of RM1.54 (+9% potential upside) and RM1.68 (+19% potential upside).
• We have placed our stop loss level at RM1.29 (or 9% downside risk).
• Listed in November last year, this under-researched company made a net profit of RM3.8m in 4QFY20, taking its full-year FY March 2020 earnings to RM15.7m, which translates to a historical PER of 35.1x. The Group’s balance sheet is strong with cash & cash equivalents standing at RM50.1m (or 12.8 sen per share) as of end-March 2020.

Source: Kenanga Research - 16 Jul 2020