Affin Bank Bhd (Trading Buy)

• AFFIN’s share price – which gapped up to a high of RM1.91 on Tuesday before closing at RM1.86 yesterday – could continue its upward trajectory ahead.

• Following a bounce off the 100-day and 200-day SMA lines, the share price is expected to shift higher on the back of: (i) the golden crossover by the slower SMA above the faster SMA recently, (ii) the DMI Plus crossing above the DMI Minus, and (iii) the rising momentum indicator (which has just climbed past the zero-line).

• On the chart, the stock will probably make its way towards our resistance thresholds of RM2.04 (R1; 10% upside potential) and RM2.16 (R2; 16% upside potential).

• Our stop loss price level is pegged at RM1.67 (or a 10% downside risk).

• Backed by its business of offering a suite of financial products and services that is catered to both retail and corporate customers, AFFIN has just announced a strong set of results with net profit coming in at RM206.8m in 4QFY21 (versus 4QFY20’s net loss of RM9.4m), taking FY21’s full-year bottomline to RM526.9m (+129% YoY).

• Going forward, consensus is projecting the group to make net earnings of RM530.8m for FY December 2022 and RM648.2m for FY December 2023.

• Valuation-wise, based on its book value per share of RM4.66 as of end-December 2021, the stock is presently trading at Price/Book multiple of 0.40x.

MBM Resources Bhd (Trading Buy)

• A price reversal may be on the horizon for MBMR shares following a gap-up on Tuesday to as high as RM3.27.

• And after overcoming both the key 200-day SMA and an ascending trendline simultaneously, the upward shift will likely persist as the momentum indicator continues to trend up beyond its crossing above the zero-line.

• With that, the stock could climb and test our resistance thresholds of RM3.60 (R1; 11% upside potential) and RM3.82 (R2; 18% upside potential).

• We have placed our stop loss price level at RM2.91 (or a 10% downside risk from yesterday’s close of RM3.24).

• An automotive group that operates through two business divisions – motor trading (with distributorship and dealership of major vehicle brands such as Perodua, Volvo, Daihatsu) and auto parts manufacturing – MBMR saw a jump in net profit to RM109.6m (+38% YoY) in 4QFY21, bringing its full-year performance to RM168.1m (+1% YoY) in FY21.

• Following which, MBMR declared an interim DPS of 5.0 sen and a special DPS of 10.0 sen (with the ex-entitlement date set on 11 March and the payment date on 30 March). The upcoming aggregate DPS payout of 15.0 sen translates to a dividend yield of 4.6%.

• Going forward, consensus is forecasting the group to register net earnings of RM193.9m for FY December 2022 and RM209.0m for FY December 2023, translating to forward PERs of 6.5x this year and 6.1x next year, respectively.

• Based on consensus DPS estimates of 20.8 sen in FY22 and 22.0 sen in FY23, MBMR shares currently offer attractive prospective dividend yields of 6.4% this year and 6.8% next year, respectively.

Source: Kenanga Research - 3 Mar 2022