Swift Haulage Bhd (Trading Buy)

• After plummeting from a peak of RM1.13 since its listing in December 2021 to hit a trough of RM0.435 in the beginning of last week, SWIFT’s share price – which has since rebounded to end at RM0.505 yesterday – might have hit an intermediate bottom already judging by the positive technical readings.

• In particular, with the Parabolic SAR signalling an uptrend reversal and the RSI indicator climbing out from the oversold territory, the shares are expected to extend the upward trajectory ahead.

• On the way up, the stock will probably advance towards our resistance thresholds of RM0.56 (R1; 11% upside potential) and RM0.65 (R2; 29% upside potential).

• We have pegged our stop loss price level at RM0.45 (representing an 11% downside risk).

• Business-wise, SWIFT is a multimodal transport operator offering logistics solutions ranging from container haulage, land transportation, warehousing & container depot and freight forwarding services.

• Amid the challenging economic conditions, the group still posted steady quarterly net earnings performance of RM12.1m in 3QFY21 that was followed by RM15.2m in 4QFY21 and RM14.3m in 1QFY22.

• Based on consensus expectations, SWIFT is forecasted to register net profit of RM56.9m for FY December 2022 and RM64.2m for FY December 2023.

• This translates to undemanding forward PERs of 7.9x this year and 7.0x next year, respectively.

P.I.E. Industrial Bhd (Trading Buy)

• PIE’s share price has probably hit an intermediate bottom after tumbling from a high of RM4.28 in mid-November last year to bounce off from a low of RM2.17 in early March this year.

• And after plotting a sequence of higher lows and higher highs since then, the shares may continue the uptrend reversal by oscillating inside an ascending price channel.

• The strengthening share price momentum is expected to persist following a recent golden cross by the 50-day SMA above the 100-day SMA and the bullish crossover by the DMI Plus above the DMI Minus.

• With that, the stock is on course to challenge our resistance hurdles of RM3.54 (R1) and RM3.77 (R2), which represent upside potentials of 12% and 19%, respectively.

• Our stop loss price level is pegged at RM2.82 (or an 11% downside risk).

• An integrated Electronics Manufacturing Services (EMS) provider which is also involved in the manufacturing of wires and cables for various industrial applications, PIE has shown steady earnings track record in spite of the economic headwinds. After reporting net profit of RM60.3m (+32% YoY) in FY December 2021, the earnings growth momentum continued in 1QFY22 with its bottomline coming in at RM18.8m (+56% YoY).

• Going forward, consensus is projecting the group to make net profit of RM75.4m in FY22 and RM84.8m in FY23, translating to forward PERs of 16.1x this year and 14.3x next year, respectively (with its 1-year forward rolling PER currently hovering marginally below its historical average).

• Financially stable, its balance sheet is backed by net cash position of RM12.2m (or 3.2 sen per share) as of end-March 2022.

Source: Kenanga Research - 29 Jun 2022