Econframe Bhd (Trading Buy)

• EFRAME manufactures metal door and window frames, including fire-related, steel and pre-hung doors.

• For the financial year ended 31 August 2021, the group’s revenue increased by RM0.4m to RM41.0m thanks to higher contribution from the manufacturing segment driven by higher sales orders for metal door frames.

• Excluding a one-time listing expense incurred in FY21, the group registered a 2% increase in net profit to RM6.3m, which is in line with the higher revenue recorded.

• Chart-wise, after reaching a peak of RM0.655 in March 2021, the stock subsequently trended downwards to hit a low of RM0.415 in mid-December 2021 and rebounded thereafter to close at RM0.50 yesterday.

• With the 20-day SMA close to crossing above the 50-day SMA following the stock’s climb above both the key SMAs recently, coupled with the bullish momentum shown by the MACD histogram, the stock could continue its upward trend and challenge our resistance levels of RM0.565 (R1; 13% upside potential) and RM0.595 (R1; 19% upside potential).

• We have pegged our stop loss at RM0.45, which represents a downside risk of 10%.

Alcom Group Bhd (Trading Buy)

• ALCOM manufactures rolled aluminum products, catering mostly for the export markets. It is also involved in property development activities.

• For 3QFY21, the group’s revenue jumped 84% YoY to RM130m as the group’s operations were previously severely impacted in 3QFY20 due to the reimposition of strict SOPs to contain the resurgence of the Covid-19 pandemic.

• In line with the higher revenue, the group’s net profit rose by 422% YoY to RM6.9m on the back of higher contributions from the manufacturing and property development segments. This brought 9MFY21’s net earnings to RM22.2m (versus a net loss of RM8.8m previously).

• Chart-wise, the 20-day SMA has recently crossed over the 50-day SMA while the stock price has also overcome both the SMAs, indicating that the stock’s short-term uptrend is intact.

• With the ADX indicator signaling a strong uptrend momentum too, this could lift the shares to challenge our resistance levels of RM1.00 (R1; 13% upside potential) and RM1.08 (R1; 22% upside potential).

• On the downside, our stop loss has been set at RM0.79, which translates to a downside risk of 11%.

Source: Kenanga Research - 21 Jan 2022