Malaysian Bulk Carriers Berhad (Trading Buy)

• MAYBULK is the largest dry bulk shipowner in Malaysia focussing on international shipping routes. It owns and operates a fleet of vessels which includes dry bulk carriers and product tankers.

• In FY20, the Group recorded a net loss of RM20.8m, wider than the net loss of RM7.3m in FY19, mainly due to lower sales from reduced hire days, a smaller fleet and lower charter rates.

• However, in a turnaround from the poor FY20 performance, the Group achieved a net profit of RM47m in 1HFY21, a 35% increase from RM34.9m in 1HFY20. Its 2QFY21 earnings (+113% QoQ to RM32m) was particularly strong lifted by higher charter rates (+34% QoQ) and exceptional gains (from the disposal of vessel and de-recognition of a joint venture).

• Technically speaking, the stock has been on an uptrend since November 2020 with the formation of a series of higher lows along the 100-day SMA.

• And most recently, after testing the 100-day SMA, the ensuing appearance of a bullish long-wick candle suggests that the long-term uptrend is still intact.

• In addition, the positive signals arising from the MACD crossover and the ongoing Parabolic SAR uptrend indicate that the upward momentum may continue.

• On its way up, we believe the share price could potentially challenge our resistance levels of RM0.85 (R1; 13% upside potential) and RM0.93 (R2; 24% upside potential).

• We have pegged our stop loss at RM0.66 (or an 12% downside risk), offering a risk-reward ratio of 1.11x.

MyNews Holdings Berhad (Trading Buy)

• MYNEWS operates a chain of retail convenience outlets, offering a wide array of products ranging from ready-to-eat food & beverage to bakery and grocery products.

• In FY Oct 20, MYNEWS recorded a net loss of RM10m (vs net profit of RM28m in FY Oct 19), hit by decreased outlet sales and lower margins (as its product mix shifted towards lower-margin daily essential goods).

• After announcing core net loss of RM19m in the 6 months ended April 2021, analysts have a mixed view of MYNEWS’ FY21 full-year results, ranging from a net profit of RM12m to a net loss of RM37m with a mean net loss estimate of RM19.5m.

• Nevertheless, consensus is expecting MYNEWS to be profitable in FY Oct 22 with a net profit forecast of RM20.7m.

• Technically speaking, the stock has been forming a series of higher lows and higher highs since May this year, suggesting that investors may be accumulating the stock as an economic recovery play.

• Since crossing above the 150-day SMA in February this year, the stock has treaded above the dynamic support line as the long-term uptrend remains intact.

• Moreover, the stochastic indicator currently shows that the stock has been oversold, indicating that the share price will likely extend its uptrend ahead.

• On its way up, the stock could challenge our resistance levels of RM1.03 (R1; 13% upside potential) and RM1.15 (R2; 26% upside potential).

• We have pegged our stop loss at RM0.81 (or a 12% downside risk).

Source: Kenanga Research - 10 Sept 2021