Kenanga Research & Investment

Daily technical highlights – (CORAZA, FIAMMA)

Publish date: Fri, 14 Apr 2023, 09:20 AM

Coraza Integrated Technology Bhd (Technical Buy)

• CORAZA’s share price has pulled back from the peak of RM1.16 in February 2023 to close at RM0.875 yesterday. With theshare price likely to find a near term support at RM0.825, a technical rebound could be anticipated.

• Riding on the rising Parabolic SAR trend and MACD indicator, the share price will likely plot an upward trajectory ahead.

• Hence, the stock could climb further to challenge our resistance levels of RM0.98 (R1; 12% upside potential) and RM1.06(R2; 21% upside potential).

• We peg our stop loss price at RM0.78, representing a downside risk of 11%.

• CORAZA is involved in the business of manufacturing metal sheet parts and precision machine components, servicingclients from various sectors including semiconductor, instrumentation, life science etc.

• Earnings-wise, the group recorded a net profit of RM4.3m in 4QFY22 (+10% QoQ), which brought full-year net profit toRM14.7m (+15% YoY).

• Based on consensus estimates, CORAZA is expected to report higher net profit of RM18.1m in FY December 2023 andRM22.2m in FY December 2024, which translate to forward PERs of 21.9x and 16.8x, respectively.

Fiamma Holdings Bhd (Technical Buy)

• FIAMMA’s share price has slid 30% from a peak of RM1.31 in December 2022 to a low of RM0.93 in March 2023. Asubsequent rebound backed by the appearance of a bullish candlestick marks the return of buying interest in the shares,which closed at RM1.05 yesterday.

• Chart-wise, we believe the stock will resume its uptrend as the Parabolic SAR indicator is on the rise while the MACD’shistogram is strengthening and the DMI Plus has crossed over the DMI Minus.

• Thus, FIAMMA’s share price could advance towards our resistance thresholds of RM1.18 (R1) and RM1.26 (R2),representing upside potentials of 12% and 20%, respectively.

• Our stop loss price is set at RM0.94 (or a downside risk of 10%).

• FIAMMA is engaged in the business of: (i) trading and services of electrical home appliances, sanitaryware, kitchen &wardrobe systems, and (ii) property development and property investment.

• Earnings-wise, the group reported a net profit of RM16.5m in 1QFY23 (+43% QoQ) mainly due to a change in fair value ofother investments (of RM9.8m).

• Based on consensus forecasts, FIAMMA’s net earnings are projected to come in at RM31.4m in FY September 2023 andRM34.7m in FY September 2024, which translate to forward PERs of 16.4x and 14.7x, respectively.

Source: Kenanga Research - 14 Apr 2023

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