NTPM Holdings Bhd (Trading Buy)

• NTPM shares are due for a technical rebound after tumbling from a 3½-year high of RM0.87 in mid-December last year to close at RM0.595 yesterday.

• Most probably, the stock – which has previously soared from a trough of RM0.295 in mid-March last year to the peak of RM0.87 – will bounce up soon as it finds support at the 50% Fibonacci retracement level of RM0.58.

• Additionally, with the RSI indicator on the verge of climbing out from the oversold territory, the stage is set for a share price reversal ahead.

• Riding on the upward momentum, the stock is expected to trend higher towards our resistance thresholds of RM0.69 (R1; 16% upside potential) and RM0.77 (R2; 29% upside potential).

• Our stop loss price is pegged at RM0.51 (or 14% downside risk).

• From a fundamental standpoint, NTPM – a manufacturer and distributor of tissue paper and personal care products – has continued to deliver resilient financial performance amid a challenging economic backdrop.

• The Group registered net profit of RM13.7m (versus 2QFY20’s net loss of RM1.4m and 1QFY21’s net profit of RM14.6m) in the Aug-Oct 2020 quarter, bringing its first half earnings ended Oct 2020 to RM28.4m (from a net loss of RM0.9m previously).

• Consensus is presently projecting NTPM to log net earnings of RM56m for FY Apr 21 and RM67m for FY Apr 22, which translates to forward PERs of 11.9x this year and 10.0x next year, respectively.

IGB Real Estate Investment Trust (Trading Buy)

• Riding on an economic reopening and recovery theme, the worst may be in the past already for IGBREIT – a retail-focussed REIT which owns two huge malls in the Klang Valley – as the ongoing rollout of the vaccination programme to break the Covid- 19 virus chain is expected to revive economic activities going forward.

• Capturing the positive outlook, consensus is currently forecasting IGBREIT’s net profit to increase from RM236.8m in FY Dec 20 (-25% YoY) to RM283.2m this year (+20%) to RM320.2m next year (+13%). In turn, this will translate to DPU projections of 7.9 sen for FY21 and 8.7 sen for FY22, which implies dividend yields of 4.6% and 5.1%, respectively.

• On the chart, after making a double-bottom reversal recently, the stock has plotted higher lows subsequently. With the share price currently challenging the 50-day SMA line, this could pave the way for the shares to scale higher highs upon a convincing breakout.

• With that, we have set our resistance targets at RM1.85 (R1) and RM1.91 (R2), which represents upside potentials of 8% and 12%, respectively.

• Our stop loss price is pegged at RM1.57 (or 8% downside risk).

Source: Kenanga Research - 5 Mar 2021