NWP Holdings Bhd (Trading Buy)

• NWP is a timber company which is involved in the manufacturing of a wide-range of quality timber products.

• On the 18th of December last year, the group announced an MOU with EZ One Bikers Sdn Bhd (which is primarily involved in the business of trading in motorcycles, accessories and related services) for potential collaboration with and/or acquisition of a stake in the latter.

• The MOU is part of NWP’s goal to diversify its timber businesses by leveraging on EX One Bikers’ deal with a well-known food delivery service provider.

• Chart-wise, the stock has been on an uptrend since early December last year after breaking above its key resistance level at RM0.22. Ichimoku-wise, the stock continues to be trading above its bullish Kumo Clouds, which indicates that the upward momentum could persist.

• With that, our upside potentials are pegged at RM0.29 (R1; +21% upside potential) and RM0.33 (R2; +38% upside potential).

• Our stop loss level is pegged at RM0.21 (13% downside potential).

Inari Amerton Bhd (Trading Buy)

• INARI is an investment holding company which has wholly-owned subsidiaries that are involved in the OSAT and electronic manufacturing services (EMS) industries.

• The group is benefiting from: (i) its key customer’s plan to increase production by 30% as compared to its previous year, and (ii) rising global sales of semiconductor which is forecasted to increase by 8.4% in FY2021 according to the Semiconductor Industry Association (SIA).

• QoQ, the group’s revenue increased to RM347.6m (+49% QoQ) in 1QFY21 due to higher seasonal demand. Meanwhile, its net income almost doubled to RM70.1m (+97% QoQ) due to better revenue contributions from its radio frequency businesses.

• Chart-wise, the stock has been trending sideways since October last year. Ichimoku-wise, the stock has consistently found support near the bullish Kumo Cloud, which leads us to believe that the upward momentum should persist.

• Based on our Fibonacci projections, we have set our overhead resistance levels at RM2.84 (R1; 8% upside potential) and RM3.00 (R2; 14% upside potential).

• Our stop loss level is pegged at RM2.45 (or 7% downside risk).

Source: Kenanga Research - 8 Jan 2021