BIMB Holdings Bhd (Trading Buy)

• From a technical perspective, after retracing from its 52-week high of RM4.58 at the beginning of December 2020, BIMB’sshare price has subsequently bounced up from the lower Bollinger Band amid rising buying interest to close at RM3.99yesterday, paving the way for the stock to move higher ahead.
   
• In addition, the rising ROC indicator, which has crossed above the zero-line, suggests strengthening momentum in the shareprice.
   
• With that, the stock could advance towards our resistance targets of RM4.50 (R1; 13% upside potential) and RM4.69 (R2;18% upside potential).
   
• We have pegged our stop loss price at RM3.55 (or 11% downside risk from yesterday’s close of RM3.99).
   
• On a fundamental note, BIMB – which is Malaysia’s first Islamic financial holding company – is currently rated as the 7thlargest bank in Malaysia by market cap.
   
• The Group offers a wide spectrum of Islamic financial & banking services and products via its 3 main subsidiaries, namelyBank Islam, Takaful Malaysia and BIMB Securities.
   
• After posting net profit of RM867.9m in FY 2020 (versus FY19’s net profit of RM935.3m), consensus is forecasting BIMB tomake net profit of RM800.7m in FY21 and RM842.8m in FY22.
  

Bermaz Auto Bhd (Trading Buy)

• BAUTO is principally involved in the distribution of Mazda vehicles as well as the provision of after-sales services.
   
• The group sold 5,337 passenger cars YTD May 2021, up 66% compared with the first five months of last year. The positivesales momentum will likely continue on the back of the extension of the sales tax exemption by the government until this yearend.
   
• After posting net profit of RM104.0m for FY April 2020 (-61% YoY), consensus is expecting BAUTO to report higher net profitof RM148.0m in FY22 and RM175.6m in FY23. This translates to forward PERs of 12.3x this year and 10.3x next year,respectively.
   
• From a technical perspective, BAUTO’s share price could trend higher after cutting above the 50-day Moving Average in thebeginning of June to close at RM1.56 yesterday.
   
• In addition, a potential breakout from the bullish ascending triangle pattern could push the stock to higher levels ahead.
   
• With the ROC indicator still rising after crossing above the zero-line, the share price could climb to challenge our resistancetargets of RM1.81 (R1) and RM1.96 (R2), which represent upside potentials of 16% and 26%, respectively.
   
• Our stop loss price is set at RM1.35 (or 13% downside risk).

Source: Kenanga Research - 24 Jun 2021