IOI Properties Group Bhd (Trading Buy)

• After sliding from a peak of RM1.74 in December 2020 to plot a sequence of lower lows along the way, IOIPG shares – which jumped 5.6% amid robust trading volume to close at RM1.13 yesterday – could stage a technical rebound ahead.

• An upward reversal in the share price is anticipated as the Parabolic SAR indicator trends higher while the MACD has crossed above the signal line.

• Riding on the strengthening momentum, the stock will probably shift towards our resistance thresholds of RM1.28 (R1) and RM1.36 (R2), which imply upside potentials of 13% and 20%, respectively.

• Our stop loss price level is set at RM0.99 (representing a 12% downside risk).

• In the business of property development, property investment and hospitality & leisure with a geographical presence in Malaysia, China and Singapore, IOIPG reported net profit of RM660.2m (+31% YoY) in FY June 2021 and RM208.8m (+9% YoY) in 1QFY22.

• Going forward, consensus is projecting the group to make net earnings of RM697.8m in FY June 2022 and RM732.4m in FY June 2023.

• Valuation-wise, based on its book value per share of RM3.57 as of end-September 2021, the stock is currently trading at a Price/Book multiple of 0.32x, or marginally below its historical mean.

Kerjaya Prospek Property Bhd (Trading Buy)

• A probable technical breakout from a short-term rectangle pattern may push KPPROP shares to stage a price rebound after falling from a high of RM1.58 exactly one year ago.

• Following yesterday’s 8.1% surge that was backed by strong buying interest to close at RM0.67, the stock will likely continue its upward trajectory after overcoming the 50-day SMA as the MACD line cut above the signal line in the oversold territory.

• With that, the share price could climb towards our resistance thresholds of RM0.77 (R1; 15% upside potential) and RM0.82 (R2; 22% upside potential).

• We have placed our stop loss price level at RM0.59 (or a 12% downside risk).

• Earnings-wise, KPPROP – which is mainly involved in the property development and hospitality businesses primarily in Malaysia – posted net profit of RM15.7m (+42% YoY) in 2QFY22, taking its 1HFY22’s bottomline to RM31.1m (+62% YoY).

• Based on its book value per share of RM1.30 as of end-September 2021, the stock is presently trading at a Price/Book multiple of 0.52x, or just slightly under its historical mean.

Source: Kenanga Research - 22 Feb 2022