Ewein Bhd (Trading Buy)

• EWEIN’s business activities encompass: (i) property development (namely the City of Dreams project in Penang), (ii)manufacturing of precision sheet metal fabricated parts, product finishing, design and fabrication of precision moulds, toolsand dies, and (iii) property investment and management (for a portfolio of strategic properties such as Menara IJM and afactory premise).

• Amid the challenging property market, the group’s revenue decreased to RM27.7m (-42.6% QoQ) while its net profitincreased marginally to RM4.7m (+4.4% QoQ) in 1QFY21.

• Based on the latest book value per share of RM0.89 as of end-March 2021, the stock is currently trading at P/BV of 0.43times

• On the chart, EWEIN’s share price has plunged from a high of RM0.835 (at the end of July 2018) to as low as RM0.175 (inend-March 2020), representing a retracement of 79%.

• Since then, the stock has rebounded while plotting higher lows along the way to form an ascending triangle with the shareprice currently on the edge of staging a technical breakout.

• The positive technical view is further affirmed by the rising ADX indicator, signalling that the price uptrend could persist.

• In addition, with a potential golden-cross on the cards as the shorter-term moving average is about to cross above the longerterm moving average, EWEIN could challenge our resistance thresholds of RM0.46 (R1; 19% upside potential) and RM0.495(R2; 29% upside potential).

• We have fixed our stop loss price at RM0.32 (SL; 17% downside risk).

Wah Seong Corporation Berhad (Trading Buy)

• WASEONG’s stock price has pulled back from a recent high of RM0.91 in early January to as low as RM0.565 in the middleof August this year before recovering partially to close at RM0.67 yesterday, registering a 15.7% YTD decline.

• The technical rebound will likely continue as: (i) the stock has started treading above the upper band of the Keltner Channel,and (ii) the Parabolic SAR indicator is trending upwards.

• With that, we believe the share price could test our resistance targets of RM0.785 (R1) and RM0.825 (R2), which representupside potentials of 17% and 23%, respectively.

• On the downside, we have pegged our stop loss price at RM0.57, which represents a downside risk of 15%.

• Fundamentally, WASEONG’s business activities consist of 2 divisions, namely: (i) Oil & Gas division, which providesspecialized pipe coating, corrosion protection services, EPC, fabrication, rental of gas compressors and process equipment,as well as various E&P products and services for the international oil and gas sector, and (ii) Industrial Services division,which is involved in renewable energy, agriculture development and infrastructure materials.

• WASEONG reported a net profit of RM1.9m in 2QFY21 (versus a net loss of RM29.6m previously). This took the 1HFY21 netprofit to RM10.5m (+114% YoY).

• Moving forward, consensus is forecasting WASEONG to report a net profit of RM15.1m in FY Dec 21 before rising toRM55.9m in FY Dec 22. This translates to forward PERs of 34.3x this year and 9.3x next year, respectively.

Source: Kenanga Research - 2 Sept 2021