Kerjaya Prospek Property Group (Trading Buy)

• KPPROP is involved in the property development and investment properties sectors. The company, which took over the listing status before switching its name from GSB Group Berhad, has since acquired land bank nearby Bloomsvale to further expand its property development business.

• The group is currently sitting on a GDV of RM2.4b as derived from its mixed property development project that is strategically located along Old Klang Road (Bloomsvale). Meanwhile, its investment properties segment has an existing asset value of RM183.4m. In addition, KPPROP is able to leverage on its sister company Kerjaya Prospek Group Bhd’s construction expertise for better cost and quality control measures.

• QoQ the group’s revenue has increased to RM108.7m (+93% QoQ) in 3QFY21 due to higher sales and progress billings for the property development segment. Meanwhile, its net income has increased in tandem to RM22.2m (+100% QoQ).

• Chart-wise, the stock has retraced from its all-time high of RM1.57 in late February this year. The stock is now challenging to break above the 20-day key SMA. With the shorter-term key SMA continues to tread above the longer-term key SMA, we thus except the buying momentum to persist.

• With that, our resistance levels are set at RM1.43 (R1; +13% upside potential) and RM1.58 (R2; +25% upside potential).

• Our stop loss is pegged at RM1.11 (-12% downside risk).

Globetronics Technology Bhd (Trading Buy)

• GTRONIC is a company that develops and manufactures sensors which are used in a multitude of electronic products, such as mobile devices, personal computers and GPS systems.

• The group is poised to benefit from its: (i) latest product commercialisation with a German client, and (ii) expansion of factory space (+30k sq ft) which is targeted to be completed by Aug / Sep 2021.

• YoY, the group’s revenue has increased to RM227.5m (+5.1% YoY) in FY20 due to higher volume loadings of key sensors. Meanwhile, its net income increased to RM50.8m (+13% YoY) given the better operational efficiency achieved.

• Fundamentally, consensus is forecasting GTRONIC to make net income of RM67.7m (+33% YoY) in FY21 and RM77.8m (+15% YoY) in FY22, which translates to forward PERs of 26.7x and 23.2x, respectively.

• Chart-wise, the stock has been treading between the key support levels of RM2.57-RM3.05 since August last year. With the stock recently tested its key support level at RM2.57, which subsequently saw the RSI forming higher highs and the bullish MACD crossover, we thus expect the stock to rebound and head north.

• Our key resistance levels are set at RM3.00 (R1; +11% upside potential) and RM3.10 (R2; +15% upside potential).

• Meanwhile, our stop loss is pegged at RM2.40 (-11% downside risk).

Source: Kenanga Research - 26 Mar 2021