Hibiscus Petroleum Bhd (Technical Buy)

• After bouncing off from a recent trough of RM0.82 on 2 October 2022, HIBISCS’ share price has staged an upward trending channel and subsequently broke out from the resistance line of RM1.07 before closing at RM1.11 yesterday.

• On the chart, the stock is poised to swing higher ahead backed by bullish indicators arising from: (i) the formation of a higher lows trendline, (ii) the positive Parabolic SAR signal, (iii) the RSI hovering above its MA line (indicating momentum strength), and (iv) the MACD is on the verge of steering away from the signal line.

• Riding on the upward trajectory, the share price is anticipated to challenge our resistance targets of RM1.23 (R1; 11% upside potential) and RM1.33 (R2; 20% upside potential).

• On the contrary, we have set our stop loss price level at RM1.00 (representing a 10% downside risk).

• A listed independent oil and gas exploration and production company with a diversified portfolio of assets and concessions located across Malaysia, United Kingdom, Australia and Vietnam – HIBISCS is a direct proxy to elevated oil prices.

• After posting a net profit of RM135.3m (+226% YoY) in 1QFY23, consensus is projecting the group to register a net profit of RM507m in FY June 2023 and RM477m in FY June 2024, which translate to forward PERs of 4.4x and 4.7x, respectively.

Ramssol Group Bhd (Technical Buy)

• Following the plotting of lower lows since mid-September 2022, RAMSSOL’s share price might found an intermediate support at RM0.375 after overcoming a negative sloping trendline to close above the 21-day EMA at RM0.39 yesterday.

• This may then set the stage for the stock to extend its upward shift based on the existence of a golden cross in the MACD indicator and the emerging Parabolic SAR uptrend.

• Ergo, the stock could climb towards our resistance thresholds of RM0.43 (R1; 10% upside potential) and RM0.46 (R2; 18% upside potential).

• Our stop loss price level is pegged at RM0.35 (or a 10% downside risk from yesterday’s close of RM0.39).

• RAMSSOL is a provider of human resources solutions focussing on human capital management and student management solutions.

• The group recorded net earnings of RM1.4m in 3QFY23 (+17% QoQ), lifting cumulative 9MFY23’s net earnings to RM3.6m (-52% YoY).

• Based on consensus expectations, RAMSSOL is projected to post net earnings of RM5.5m in FY December 2022 and RM8.3m in FY December 2023. This translates to forward PERs of 16.2x this year and 10.7x next year, respectively.

Source: Kenanga Research - 1 Dec 2022