Kenanga Research & Investment

Daily technical highlights – (PERDANA, BPLANT)

Publish date: Thu, 25 Feb 2021, 09:41 AM

Perdana Petroleum Bhd (Trading Buy)

• PERDANA is involved in the provision of offshore marine support services for the upstream oil and gas industry in the domestic and regional markets.

• Given the brighter oil and gas industry outlook following the rebound in crude oil price (which is currently hovering at a 13- month high of USD66 per barrel), the worst may be over for the Group as oil majors will likely carry out their planned capital expenditure going forward.

• On the back of the improved sentiment in the oil & gas sector, the stock may play catch up with its peers ahead.

• From a charting perspective, PERDANA shares will probably attempt to exit a consolidation phase that started in mid-August last year following the emergence of positive technical signals.

• After overcoming the 50-day SMA line recently, and coupled with the momentum indicator still treading above the zero line, the share price could stage an upward bias to climb towards our resistance thresholds of RM0.21 (R1) and RM0.24 (R2). This translates to upside potentials of 27% and 45%, respectively.

• Our stop loss price is pegged at RM0.13 (which represents 21% downside risk from yesterday’s close of RM0.165).

Boustead Plantations Bhd (Trading Buy)

• With land bank spanning 98,200 ha, of which 79,400 ha is cultivated with oil palm, BPLANT stands to benefit from rising CPO prices. This comes as spot month forward CPO price has extended its uptrend with an incremental 15% jump since early February this year to RM3,920 per MT currently.

• Capturing the higher CPO price impact, the Group reported net profit of RM18.0m in 3QFY20 (versus 3QFY19’s net loss of RM34.3m and 2QFY20’s net profit of RM7.1m). The better performance was lifted by an average CPO selling price of RM2,772 per MT during the quarter, compared with 3QFY19’s RM2,026/MT and 2QFY20’s RM2,367/MT. This brought its nine-month earnings ended September 2020 to RM15.5m (-46% YoY).

• On the chart, after hitting a trough of RM0.20 during the market sell-off in March last year, the stock subsequently staged a steady recovery to plot higher lows along the way.

• With the share price currently treading near the ascending trendline, this presents a timely buying opportunity. Driven by the rising momentum indicator, BPLANT shares could continue the upward trajectory to test our resistance targets of RM0.64 (R1; 13% upside potential) and RM0.70 (R2; 24% upside potential).

• We have placed our stop loss price at RM0.50 (or 12% downside risk from its last traded price of RM0.565).

Source: Kenanga Research - 25 Feb 2021

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