Taliworks Corporation Bhd (Technical Buy)

• Following the plotting of a sequence of lower highs – as TALIWRK’s share price slid from a high of RM0.96 in mid-August lastyear to hit the trough of RM0.845 thrice in December 2022 and January 2023 – its breakout from the descending trendlinelast Friday (backed by heavier-than-usual trading volume) could pave the way for the stock to extend its upward trajectory.

• Technically speaking, the positive momentum is expected to persist on account of the DMI Plus crossing above the DMIMinus and the strengthening MACD signal.

• Consequently, the stock price could climb towards our resistance thresholds of RM0.96 (R1; 9% upside potential) andRM1.01 (R2; 15% upside potential).

• Our stop loss price level is set at RM0.80 (representing a downside risk of 9% from yesterday’s closing price of RM0.88).

• An infrastructure group with businesses in: (i) water treatment, supply & distribution, (ii) highway & toll management, (iii)waste management, (iv) engineering & construction, and (v) renewable energy, TALIWRK reported net profit of RM21.0m(+72% YoY) in 4QFY22, taking FY22 bottomline to RM55.1m (-30% YoY).

• According to consensus expectations, the group is forecasted to post net earnings of RM67.8m for FY December 2023 andRM84.2m for FY December 2024. This translates to forward PERs of 26.2x this year and 21.1x next year, respectively (withits 1-year rolling forward PER hovering just marginally below its historical mean currently).

• In addition, consensus is projecting TALIWRK to pay DPS of 6.7 sen each for FY23 and FY24, implying attractive prospectivedividend yields of 7.6% p.a. going forward.

UEM Sunrise Bhd (Technical Buy)

• After bouncing off from a trough of RM0.185 in mid-October last year to chart higher lows along the way, UEMS’ share price –which ended at RM0.255 yesterday – will likely continue to ride on the positive momentum ahead.

• A resumption of the upward trajectory is anticipated following the golden cross by the 50-day SMA above the 100-day SMAas the stochastic indicator saw its %K line cutting above the %D line in the oversold territory.

• Backed by these bullish technical signals, the stock could shift higher towards our resistance targets of RM0.29 (R1; 14%upside potential) and RM0.32 (R2; 25% upside potential).

• We have placed our stop loss price level at RM0.23 (translating to a downside risk of 10%).

• In the property development business, UEMS reported net profit of RM20.4m in 3QFY22 (a turnaround from 3QFY21’s netloss of RM50.4m), which brought 9MFY22 bottomline to RM60.1m (versus net loss of RM62.1m previously).

• Based on consensus projections, the group would show net earnings of RM80.4m for FY December 2022, RM82.2m for FYDecember 2023 and RM102.0m for FY December 2024.

• Valuation-wise, UEMS shares are currently trading at a Price / Book Value multiple of 0.19x (or at 1.5 SD below its historicalmean) based on its book value per share of RM1.33 as of end-September 2022.

Source: Kenanga Research - 21 Feb 2023