Samaiden Group Bhd (Trading Buy)

• Just listed on 15th October 2020, SAMAIDEN is a renewable energy company that provides: (i) EPCC of solar photovoltaic, (ii) renewable energy consultation, and (ii) operations and maintenance services.
• Given the government’s recent Budget 2021 which has allocated RM2b to continue its Green Technology Financing Scheme 3.0 and RM250m to target rural electricity supply with a target of 1.1k houses, we thus believe SAMAIDEN’s green business could benefit from this theme.
• Fundamentally, the group has registered an increase in revenue of RM76.2m (+12% YoY) while net income came in at RM7.3m (-3% YoY) in FY20.
• Chart-wise, the stock has fallen from an all-time high of RM1.12 on 15th October 2020 to a low of RM0.555 on 2nd November 2020 following the formation of 8 consecutive bearish candlesticks. The stock has since then rebounded to its current level, which we believe could sustain given the bullish force index and the uptick in RSI indicator.
• Based on our Fibonacci projections, our overhead resistance levels are positioned at RM0.905 (R1; +9% upside potential) and RM0.985 (R2; +19% upside potential).
• Our stop loss level is pegged at RM0.770 (-7%, downside risk).

Hextar Global Bhd (Trading Buy)

• HEXTAR is a company that is involved in the: (i) plantation industry selling agro-chemicals products, and (ii) consumer segment via the distribution of wet wipes, sanitary towels and tissue products.
• The group has experienced a strong 1HFY20 with its revenue coming in at RM205.3m (+79% YoY) while its net income has turned from a net loss of RM22.4m to a net profit of RM20.6m. This was mainly due to the: (i) stronger contribution from its agro-chemical products given the better CPO prices, and (ii) its consumer segment which benefited from the pandemic as consumers become more cautious on the hygienic aspect.
• In addition, the group has recently proposed to acquire Biogas Engineering Sdn Bhd and its subsidiary Biogas Environmental Engineering Sdn Bhd to expand its presence in the agriculture sector by providing solutions to palm oil mills. Note that the purchase consideration entails a net profit guarantee of RM3m from the completion date until 31st December 2021.
• On the chart, the stock has been on an uptrend since the March crash this year. Ichimoku-wise, the stock is currently forming a bullish continuation pattern after finding support at its “Bullish Kumo Cloud”.
• In addition, given an uptick in the RSI indicator, we expect the bullish momentum to persist and find its next resistance levels at RM0.830 (R1; +12% upside potential) and RM0.910 (R2; +23% upside potential).
• Meanwhile, our stop loss level is pegged at RM0.660 (-11% downside risk).

Source: Kenanga Research - 13 Nov 2020