Kenanga Research & Investment

Daily technical highlights – (INARI, SUNVIEW)

Publish date: Thu, 25 May 2023, 09:05 AM

Inari Amerton Bhd (Technical Buy)

• INARI’s share price has been trading in a downward sloping channel since March 2022, forming lower highs and lower lowsbefore bouncing up from the bottom end of the channel to close at RM2.25 yesterday.

• A technical rebound could be forthcoming on the back of the following positive signals: (i) the Stochastic is climbing out fromthe oversold territory, (ii) the DMI Plus is on the verge of crossing above the DMI Minus, and (iii) the emerging ParabolicSAR uptrend.

• An upward shift could then propel the stock to advance towards our resistance thresholds of RM2.53 (R1; 12% upsidepotential) and RM2.70 (R2; 20% upside potential).

• Our stop loss price is pegged at RM1.97 (representing a 12% downside risk).

• Fundamentally, INARI is involved in the electronics manufacturing services (EMS) industry, providing outsourcedsemiconductor assembly and test (OSAT) niche services in radio frequency (RF) system-in-package (SiP) for smart mobiledevices, fibre optic transceivers and other electronics manufacturing services.

• The group registered a net profit of RM93.6m (-12% QoQ) in 2QFY23, which lifted its cumulative earnings to RM199.9m(-7% YoY) in 1HFY23.

• Based on consensus estimates, INARI is anticipated to deliver a net profit of RM386.3m in FY June 2023 and RM429.5m inFY June 2024, which translate to forward PERs of 21.8x this year and 19.6x next year, respectively.

Sunview Group Bhd (Technical Buy)

• After falling from the peak of RM0.905 on 18 April 2023 to as low as RM0.655 on 8 May 2023, SUNVIEW’s share price hassubsequently bounced off from an intermediate support to close at RM0.70 yesterday.

• Technically speaking, the stock is poised to climb higher as suggested by the following bullish technical indicators: (i) theongoing Parabolic SAR uptrend, (ii) the MACD remains hovering above the signal line, and (iii) the 9-day MA line is on theverge of crossing above the 21-day MA line.

• That said, the stock could rise to challenge our resistance targets of RM0.77 (R1; 10% upside potential) and RM0.88 (R2;26% upside potential).

• Conversely, our stop loss level is set at RM0.63 (representing a 10% downside risk).

• SUNVIEW – an engineering, procurement, construction & commissioning (EPCC) company in the solar photovoltaic space –reported net earnings of RM2.3m in 3QFY23 (versus RM3.2m in 2QFY23), which brought its 9MFY23 cumulative earnings toRM7.4m (prior year comparison was not available as the Company was listed on 17 October 2022).

• Going forward, consensus is expecting the group to log a net profit of RM15.4m in FY March 2023 before rising further toRM24.3m in FY March 2024, which translate to forward PERs of 21.3x and 13.5x, respectively.

Source: Kenanga Research - 25 May 2023

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