Kenanga Research & Investment

Daily technical highlights – (CORAZA, TSH)

Publish date: Thu, 08 Sep 2022, 09:20 AM

Coraza Integrated Technology Bhd (Technical Buy)

• Following its pullback from a high of RM0.885 on 26 August, CORAZA’s share price has recently bounced off from a key intermediate support line at RM0.73 (which represents a 61.8% Fibonacci retracement level) before closing at RM0.745 yesterday.

• The upward momentum is poised to continue on the back of bullish technical signals triggered by: (i) the price crossing back above the lower Bollinger Band, (ii) the stochastic indicator in the midst of climbing out from the oversold zone, and (iii) the appearance of a long legged doji candlestick on 5 September.

• Consequently, the stock will likely rise to challenge our resistance thresholds of RM0.84 (R1) and RM0.89 (R2), which represent upside potentials of 13% and 19%, respectively.

• Our stop loss price level is pegged at RM0.65 (or a 13% downside risk from yesterday’s close of RM0.745).

• An engineering support services provider, CORAZA is mainly involved in the business of manufacturing metal sheet parts and precision machine components, servicing clients from various sectors including semiconductor, instrumentation, life science etc.

• The group reported net profit of RM4.2m in 2QFY22 (+90% QoQ), lifting its cumulative bottomline by 19% YoY to RM6.4m in 1HFY22.

• The strong financial performance is expected to continue with consensus currently anticipating CORAZA to make net earnings of RM15.6m in FY December 2022 before soaring further to RM19.7m in FY December 2023. This translates to forward PERs of 20.4x and 16.3x, respectively.

TSH Resources Bhd (Technical Buy)

• In tandem with the falling CPO price since April this year, TSH’s share price has declined from its peak of RM1.89 on 25 April before finding an intermediate support at RM0.92 in mid-July.

• The stock subsequently recovered from the dip to close above the 5-day EMA at RM1.05 yesterday.

• A continuation of the price rebound is anticipated with the probable formation of a bullish cup-and-handle pattern while the stochastic indicator is signalling a positive momentum following its reversal from the oversold zone.

• On the chart, the share price is expected to rise towards our resistance thresholds of RM1.17 (R1; 11% upside potential) and RM1.23 (R2; 17% upside potential).

• Our stop loss level is set at RM0.94 (or a downside risk of 10%).

• TSH – a plantation group in the business of oil palm cultivation and processing of fresh fruit bunches into crude palm oil (CPO) and palm kernel – reported a net profit of RM57.3m (+44.3% YoY) in 2QFY22. The robust earnings momentum consequently brought its 1HFY22 bottomline to RM159.2m (+263% YoY).

• Going forward, consensus is forecasting TSH to make net profit of RM198.9m in FY December 2022 and RM145.2m in FY December 2023, which translate to forward PERs of 7.3x and 10x, respectively.

Source: Kenanga Research - 8 Sept 2022

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Did deeper into Tsh as it is also unlocking it's assets for profits

already sold Sabah 2 palm oil estates for Rm248 mil cash with 7.56 sen profit

now 2/3 of Bulugan land sold for approximately rm500 mil out of total Rm731.09 millions already received and will be in Nov 2022 results as 20 sen profit

Further paring down of debts will make Tsh a debt free cash rich entity like Inno its associate co and will also join Inno in giving good dividends

2022-09-09 08:27

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