Bumi Armada Bhd (Trading Buy)

• Chart-wise, after falling from a peak of RM0.575 in Feb 2022 to bottom at RM0.365 in March 2022, ARMADA’s share price has since rebounded to form higher highs and higher lows.

• Following the recent bounce-off from the trough, the upward momentum will likely continue based on the positive technical signals arising from: (i) the increasing Parabolic SAR trend, (ii) the rising RSI indicator, and (iii) a bullish MACD signal with both lines cutting above the zero-line.

• With that, the stock could rise to challenge our resistance levels of RM0.51 (R1; 11% upside potential) and RM0.575 (R2; 25% upside potential).

• We have pegged our stop loss at RM0.41, representing a downside risk of 11%.

• ARMADA is an international offshore energy facilities and services provider which owns and operates offshore vessels to support oil & gas exploration and production activities.

• Based on the latest results, ARMADA recorded a net profit of RM186.3m (+65% QoQ, +17% YoY) in 1QFY22, driven by stronger vessel availability for its FPSO and lower depreciation and finance costs.

• Amid elevated global oil prices, consensus is currently projecting the group to post net earnings of RM643.4m in FY Dec 2022 and RM647.8m in FY Dec 2023, which translate to forward PERs of 4.2x for both years, respectively.

Optimax Holdings Bhd (Trading Buy)

• OPTIMAX shares slid from a peak of RM0.935 in March 2021 to hit a low of RM0.50 within a year, down 47%. A subsequent trend reversal then lifted the price to plot higher lows after bouncing up from a recent low of RM0.55.

• With the Parabolic SAR indicator on the rise and coupled with the MACD line crossing over the signal line, we anticipate that the stock will continue to trend upwards.

• Thus, we believe OPTIMAX’s share price could climb towards our resistance thresholds of RM0.69 (R1; 11% upside potential) and RM0.75 (R2; 21% upside potential).

• Our stop loss price level is set at RM0.55 (or a downside risk of 11%).

• Business-wise, OPTIMAX provides healthcare services specializing in eye care services.

• Earnings-wise, the group reported a net profit of RM3.0m (+114% YoY, -33% QoQ) in 1QFY22 as a decrease in vaccination revenue (due to the high vaccination rate for the Malaysian population) was offset by higher contribution from the eye specialist services segment.

• And as the country transitions into the endemic phase, the group expects to see an increase in the number of patients seeking its eye specialist services. Based on consensus estimates, OPTIMAX is projected to report a net profit of RM14.5m in FY Dec 2022 and RM17.5m in FY Dec 2023, translating to forward PERs of 23x and 20.7x, respectively.

Source: Kenanga Research - 2 Jun 2022