Kim Tech Cheong Consolidated Bhd (Technical Buy)

• Chart-wise, KTC’s share price has retraced from a recent peak of RM0.26 in November to a trough of RM0.19 in the later part of this month before staging a subsequent rebound to close above the 21-day EMA at RM0.22 yesterday

• On the verge of overcoming the Parabolic SAR downtrend and the RSI crossing above the MA line, we anticipate the stock will continue to climb further after staying above the 21-day EMA.

• Thus, we believe KTC’s share price could advance towards our resistance thresholds of RM0.25 (R1) and RM0.27 (R2), representing upside potentials of 13% and 23%, respectively.

• Our stop loss price is set at RM0.195 (or a downside risk of 11%).

• KTC is engaged in the provision of distribution and warehousing services of third-party consumer packaging goods in East Malaysia. KTC also manufacture bakery products which are sold in the Sabah.

• Earnings-wise, the group recorded net profit of RM4.3m (+9% QoQ) in 1QFY23, mainly due to increase in personal care and cosmetics products sales as well as household products in their distribution segments.

MyNews Holdings Bhd (Technical Buy)

• MYNEWS’s share price has continued to move in an ascending price channel with formation of higher highs and higher lows, after rising from a low of RM0.36 in early-August 2022.

• Backed by the rising Parabolic SAR indicator and the bullish of MACD signal, we believe MYNEWS’s share price will extend its upward trajectory.

• Hence, the stock could rise to challenge our resistance levels of RM0.68 (R1; 11% upside potential) and RM0.745 (R2; 20% upside potential).

• We peg our stop loss at RM0.55, representing a downside risk of 10%.

• MYNEWS operates convenience stores and produces ready-to-eat fresh food items and bakery products.

• It reported a much-reduced net loss of RM1.5m (-90% QoQ) in 3QFY22, taking 9MFY22 bottomline to -RM19.5m (-43% YoY),

• Consensus estimates point to a full-year FYE Oct 2022 net loss of RM20.2m, before turning around with a net profit of RM11.6m in FYE Oct 2023 on improved sales and cost efficiency. This translates to a forward PER of 30.3x.

Source: Kenanga Research - 8 Dec 2022