Revenue Group Bhd (Trading Buy)

• REVENUE’s products and services are divided into three segments, namely the deployment of: (i) Electronic Data Capture (EDC) terminals, (ii) electronic transaction processing, and (iii) solutions and services related to payments infrastructure.

• The group is positioned uniquely with clients from various industries ranging from banks, non-bank institutions, physical store merchants, online store merchants and e-money payment schemes.

• Despite revenue decreasing to RM18.8m (-3.6% YoY) in the 1QFY22, their net income rose to RM3.5m (+67% YoY) due to lower cost of sales.

• Chart-wise, a double top pattern was observed at the RM2.42 level in April, following which the stock plunged 29% to a low of RM1.71 in end May 2021.

• Subsequently, the stock traded sideways for a duration of approximately 5 ½ months before declining further to a low of RM1.40 in the beginning of December. Since then, the stock climbed 7% to close at RM1.50 yesterday after surging 1.35% from the previous day’s close.

• Technically speaking, the stock is currently trading around the middle band of the Bollinger Band – indicating steady buying interest.

• With the ROC indicator crossing above the zero-line, the stock could continue to climb to challenge our resistance targets of RM1.75 (R1; 17% upside potential) and RM1.88 (R2; 25% upside potential).

• We have pegged our stop loss at RM1.31 (or 13% downside risk from yesterday’s close of RM1.50)

Mieco Chipboard Berhad (Trading Buy)

• Chart-wise, after hitting a high of RM0.75 (beginning May), the stock pulled back 42% from its peak to a trough of RM0.435 (end May).

• Thereafter, the stock traded sideways for approximately 4 months before spiking to a high of RM0.585 (beginning October). Since then, the stock once again pulled back 15% to close at RM0.495, yesterday while registering a decline of 12% YTD.

• From a technical perspective, it is crucial to note that the stock has just closed above the 50-day Moving Average – indicating a reversal in trend is on the table.

• Riding on the positive momentum coupled with the Parabolic SAR indicator plotting its first upward movement, we believe the stock could climb to challenge our resistance targets of RM0.57 (R1) and RM0.605 (R2), which represent upside potentials of 15% and 22%, respectively.

• We set our stop loss at RM0.425, which represents a downside potential of 14%.

• MIECO’s core business revolves around the manufacturing of particleboards and has factories located in Gebeng and Kechau Tai, Pahang with an annual production capacity of 1,000,000m^3 per annum.

• In its most recent 3QFY21, MIECO reported a net loss of RM8.2m driven by lower sales compared to a net profit of RM8.0m in the preceding quarter, narrowing its 9MFY21 net loss to RM0.6m compared to a net loss of RM31.0m in the preceding period.

Source: Kenanga Research - 16 Dec 2021