Astro Malaysia Holdings Berhad (Trading Buy)

• ASTRO is principally involved in providing a variety of entertainment contents across its TV, radio, digital and commerce platforms.

• In 2019, ASTRO launched Ultra Box, their latest 4K UHD set-top box, which has been gaining traction judging by its most recent 44% QoQ growth in installations. Their recently launched Ulti Box (a HD set-top box) is also expected to be well received due to its cheaper installation charges compared to Ultra Box.

• Moving forward, consensus expects ASTRO to achieve a core net profit of RM524m and RM554m in FY Jan 22 and FY Jan 23, respectively. At the current share price, these imply forward PERs of 10x and 9.4x respectively, both of which are below its 5-year historical average of 15.2x.

• Technically speaking, the share price has been forming higher lows into resistance since bottoming out in November 2020. • Since breaking above the 100-day SMA in November 2020, the share price has continued to tread above it, suggesting that its uptrend pattern remains intact.

• With the MACD line hovering above both the signal line and zero line, we believe that the stock could be attempting to pull away further from the former resistance level of RM0.98.

• The anticipated upward movement could then lift the share price to challenge our resistance levels of RM1.11 (R1; 11% upside potential) and RM1.24 (R2; 24% upside potential).

• We have pegged our stop loss price at RM0.90 (10% downside risk).

IJM Corporation Berhad (Trading Buy)

• IJM provides construction services. The group is also involved in property development, quarrying, manufacturing of premix products, oil palm plantations and education services.

• In the most recent quarter, IJM has seen strong property and plantation contributions due to higher-than-expected property sales and CPO prices, respectively. This brought the group’s YTD earnings to RM164m (-14% YoY) for the nine-month period ended Dec 2020.

• Moving forward, consensus expects the group to make RM247m and RM340m in FY March 21 and FY March 22, respectively. These imply forward PERs of 26.2x and 19x, respectively.

• Meanwhile, the emergence of Sunway Bhd as a shareholder in IJM (with a 4.95% stake as of end-Feb 2021 based on recent news report) could be seen as a vote of confidence in the fundamentals of the group.

• Technically speaking, the share price has been forming higher lows into resistance since bottoming out in August 2020.

• In one of the recent swing lows, the share price found strong support along the 125-day SMA before rebounding upwards, suggesting that the price is still on an uptrend.

• With the MACD line treading above the signal line and heading upwards, an anticipated upward movement in the share price could challenge our resistance levels of RM1.98 (R1; 11% upside potential) and RM2.12 (R2; 18% upside potential).

• We have pegged our stop loss price at RM1.60 (11% downside risk).

Source: Kenanga Research - 8 Apr 2021