AMMB Holdings Bhd (Trading Buy)

• AMBANK is currently rated as the 6th largest bank in Malaysia by market cap with business activities comprising: (i)Wholesale Banking, (ii) Investment Banking, (iii) Retail Banking, (iv) Business Banking, (v) Islamic Banking, (vi) GeneralInsurance, (vii) Life Insurance, and (viii) Family Takaful.
• After posting net loss of RM3.8b in FY March 2021 (versus FY20’s net profit of RM1.3b), consensus is forecasting AMMB tobounce back with net profit of RM1.3b in FY22 and RM1.4b in FY23.
• Based on the group’s book value per share of RM4.87 as of end-March this year, the stock is currently valued at P/BVmultiple of 0.6x.
• On the chart, after falling to a 52-week low of RM2.63 around the beginning of March 2021, the share price has subsequentlyrecovered by 15.6% to close at RM3.04 yesterday.
• With the CCI indicator signalling a positive bias as it treads above the 130++ mark, coupled with the share price recentlycutting above the 50-day moving average, we anticipate a further appreciation in the stock moving forward.
• With that, the stock could advance towards our resistance targets of RM3.47 (R1; 14% upside potential) and RM3.69 (R2;21% upside potential).
• We have pegged our stop loss price at RM2.63 (or 13% downside risk from yesterday’s close of RMRM3.04).

AirAsia Group Bhd (Trading Buy)

• A probable price appreciation in AIRASIA shares is on the cards as the 50-day moving average has just crossed over the100-day moving average.
• The positive technical view is further affirmed by the rising ADX pattern which indicates the share price uptrend (which startedto move up from around RM0.80 in end May) could persist.
• A continuation of the buying interest will likely lift the share price to challenge our resistance targets of RM1.13 (R1) andRM1.20 (R2), which represent upside potentials of 22% and 30%, respectively.
• Our stop loss price is set at RM0.765 (or 17% downside risk).
• On the fundamental front, as a market leader in low-cost air travel in Asean that has adopted the lean, no-frills businessmodel, AIRASIA is a recovery play on the back of pent-up travel demand when international borders are re-open possiblysometime towards the later part of this year or early next year following the acceleration of vaccination programmes acrossthe region.

Source: Kenanga Research - 17 Jun 2021