Kenanga Research & Investment

Daily technical highlights – (CENGILD, MI)

Publish date: Fri, 23 Sep 2022, 10:10 AM

Cengild Medical Bhd (Technical Buy)

• CENGILD’s share price might have bounced off an intermediate support line at RM0.45 (which represents the 78.6% Fibonacci retracement level from a high of RM0.58 in mid-September) after jumping 8.8% yesterday to close at RM0.49 amid heavy trading volume.

• On the chart, the share price is poised to maintain its upward momentum on the back of the following bullish technical signals: (i) an extension of a positive sloping trendline that started in June 2022, and (ii) the stochastic indicator showing the %K line crossing over the %D line in the oversold zone.

• Hence, the stock is anticipated to climb further and challenge our resistance thresholds of RM0.56 (R1; 14% upside potential) and RM0.60 (R2; 22% upside potential).

• Our stop loss price level is set at RM0.43 (representing a downside risk of 12%).

• Listed on 18 April this year, CENGILD is a healthcare service provider operating a medical centre specialising in the diagnosis and treatment of gastrointestinal, liver diseases and obesity.

• Earnings-wise, the group made net profit of RM3.8m in 4QFY22 (+111% QoQ), which then took its FY June 2022’s results to RM9.4m (-6% YoY).

Mi Technovation Bhd (Technical Buy)

• Following a sudden surge to a high of RM1.36 on 9 September, MI’s share price has subsequently retreated to find an intermediate support at RM1.21 (which coincides with the Gann Square of 9 principle). Still, its swift rebound of 9.1% to close at RM1.32 yesterday may be an indication of follow-through buying interest.

• The share price is anticipated to shift higher in view of the positive stochastic crossover after overcoming the 5-day EMA.

• A resumption of the upward trajectory could then propel the stock towards our resistance targets of RM1.50 (R1) and RM1.63 (R2). This represents upside potentials of 14% and 23%, respectively.

• We have pegged our stop loss price level at RM1.15 (or a 13% downside risk).

• MI – which is principally involved in the design, manufacture and distribution of wafer level chip scaling packaging (WLCSP) machines for the semiconductor industry – reported a net profit of RM18.7m (+46% QoQ) in 2QFY22 (which was driven by its customers’ capex expansions and the strengthening USD against both MYR and NTD). This brought its bottomline to RM31.5m (+6.4% YoY) in 1HFY22.

• Moving forward, consensus is expecting MI to post net profit of RM60m in FY December 2022 and RM75.9m in FY December 2023, which translate to forward PERs of 19.5x this year and 15.4x next year, respectively.

Source: Kenanga Research - 23 Sept 2022

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