MyTech Group Bhd (Technical Buy)

• Chart-wise, MYTECH’s share price has rebounded from a low of RM0.51 on Tuesday to plot a long candlestick and close at RM0.58 yesterday, possibly forming a double-bottom reversal pattern ahead.

• With the DMI Plus crossing above the DMI Minus and the stochastic indicator also showing a bullish crossover in the oversold territory, we anticipate the stock will continue to climb higher.

• Thus, we believe MYTECH’s share price could rise towards our resistance thresholds of RM0.64 (R1) and RM0.70 (R2), representing upside potentials of 10% and 21%, respectively.

• Our stop loss price is set at RM0.52 (or a downside risk of 10%).

• MYTECH is engaged in the provision of management & financing services, rental of properties as well as the manufacturing of precision springs and hotel operations.

• Earnings-wise, the group reported net profit of RM0.5m (+400% QoQ) in 1QFY22, lifted mainly by improved performance in the hotel division following the lifting of movement restriction and the opening of international borders.

Power Root Bhd (Technical Buy)

• After retracing from a high of RM2.11 in September 2022, PWROOT’s share price has rebounded from a low of RM1.82 on Monday by plotting several long candlesticks since then, indicating the return of buying interest in the stock.

• Following which, the share price will likely resume its uptrend pattern backed by: (i) the rising Parabolic SAR indicator, and (ii) the DMI Plus crossing above the DMI Minus.

• Thus, we believe PWROOT’s share price could climb towards our resistance thresholds of RM2.23 (R1) and RM2.40 (R2), representing upside potentials of 11% and 19%, respectively.

• Our stop loss price is set at RM1.81 (or a downside risk of 10%).

• Fundamental-wise, PWROOT is engaged in the business of manufacturing and distribution of beverage products.

• The group reported net profit of RM15.3m (+21% QoQ) in 1QFY23, lifted mainly by higher revenue and foreign exchange gains.

• Going forward, consensus is projecting PWROOT to report net profit of RM47.6m in FY March 2023 and RM49.8m in FY March 2024, which translate to forward PERs of 17.6x and 16.8x, respectively.

Source: Kenanga Research - 7 Oct 2022