JHM Consolidation Bhd (Trading Buy)

• JHM is involved in the assembly of automotive rear lighting, production of light emitting diode’s application to support 3D effect.
• The company continues to see strong orders from existing customers for its industrial segment. In addition, the group is also in the midst of securing a new land for its new US customer which is looking to diversify their supply chain to Malaysia. All these are viewed positively, as it would translate to better earnings going forward.
• QoQ, 4QFY20 revenue decreased marginally RM76.2m (-2.4%, QoQ) as the on-going Covid pandemic affected the group’s business. Meanwhile, its bottom-line increased to RM8m (+50.3%,QoQ) due to lower operating cost as a result of cost optimisation programmes.
• Chart-wise the stock has retraced from its all-time high (RM2.67) as of 3rd February this year. Currently, the stock appears to be finding support at its 20-day key SMA backed by a bullish MACD crossover and an uptick in RSI. Given those reasons, we believe the stock could be staging a rebound.
• Should the buying momentum resume this could lift the share near its overhead resistance at RM2.25 (R1:+15% upside potential) and RM2.40 (R2: +23% upside potential).
• Meanwhile, our stop loss is pegged at RM1.70 (-13%, downside risk).

Inari Amerton Bhd (Trading Buy)

• INARI is a company involved in the OSAT and electronic manufacturing services (EMS) services.
• The group stands to benefit from its (i) capacity expansion plan of which 480k sq ft remains unutilized (i.e c.70% of its new facility), (ii) strong visibility from its RF segment, and (iii) potential acquisition of new customer which could diversify its business.
• QoQ, the group’s 2QFY21 revenue increased to RM376.8m(+8%,QoQ), due to better RF orders. Due to the aforementioned reason, the group’s 2QFY21 earnings increased to RM90.1m (+28%,QoQ)
• Chart-wise the stock has retraced from an all-time high of RM3.75 as of early March this year. Since then, the stock has found support at its 50-Day key-SMA and has then continued its upward movement. In addition, yesterday’s bullish candlestick has broken above its 50-Day key-SMA which could indicate signs of an early reversal.
• With that, our key resistance are plotted at RM3.75 (R1:+11% upside potential) and RM3.90 (R2:+15% upside potential).
• Meanwhile our stop loss is pegged at RM3.00 (-11% downside risk)

Source: Kenanga Research - 2 Apr 2021