Mynews Holdings Bhd (Technical Buy)

• After sliding from the high of RM0.72 in mid-January this year to as low as RM0.435 in the second half of April, which wasfollowed by a sideways trading pattern, MYNEWS’ share price might have hit an intermediate bottom already.

• An upward trajectory could be seen ahead in view of the positive technical signals triggered by: (i) the existence of a bullishMACD divergence (with the indicator showing a rising trend in the oversold area amid a flattish price line), (ii) thestrengthening stochastic signal, and (iii) the sighting of several dragonfly doji candlesticks.

• That being the case, the stock is expected to climb towards our first resistance hurdle of RM0.53 (R1; 13% upside potential).Thereafter, the shares may climb further to close the price gap (left opened in end-March this year) and challenge our nextresistance threshold of RM0.57 (R2; 21% upside potential).

• Our stop loss price level is set at RM0.42 (representing a downside risk of 11% from its last traded price of RM0.47).

• MYNEWS is principally involved in the business of operating retail convenience store chains. It is also engaged in theproduction of ready-to-eat meals and bakery products to serve its retail chains.

• The group narrowed its net loss to RM3.2m in 1QFY23 (from RM7.9m in 1QFY22) after previously reporting net loss ofRM18.2m in FY22 (an improvement from FY21’s net loss of RM43.2m).

• Based on consensus expectations, MYNEWS is projected to turn around with net profit of RM7.7m in FY October 2023 beforerising further to RM17.0m in FY October 2024.

• Valuation-wise, this translates to forward PERs of 41.6x and 18.9x, respectively with its 1-year rolling forward PER currentlytrading at 1SD below its historical mean.

Affin Bank Bhd (Technical Buy)

• A technical rebound – from a low of RM1.79 last Friday – may be forthcoming for AFFIN’s share price (which ended atRM1.81 yesterday).

• On the chart, an upward shift in the shares is anticipated as both the stochastic and RSI indicators are in the midst of makingtheir way out from the oversold condition.

• This could then lift the stock to reach our resistance thresholds of RM2.01 (R1) and RM2.11 (R2), translating to upsidepotentials of 11% and 17%, respectively.

• We have placed our stop loss price level at RM1.63 (representing a downside risk of 10%).

• A financial group that offers a suite of financial products and services to both retail and corporate customers, AFFINannounced net profit (from continuing operations) of RM199.7m (-54% YoY) in FY December 2022 that was followed byquarterly net earnings (from continuing operations) of RM149.0m (+19% YoY) in 1QFY23.

• According to consensus estimates, the group is forecasted to register net profit of RM534.7m for FY23 and RM593.2m forFY24.

• In terms of dividend returns, based on consensus FY23-FY24 DPS projections of 12.4 sen and 13.7 sen, the shares currentlyoffer appealing prospective yields of 6.9% and 7.6%, respectively.

• Valuation-wise, based on its book value per share of RM4.76 as of end-March 2023, the stock is presently trading atPrice/Book multiple of 0.38x (or just slightly below its historical mean)

Source: Kenanga Research - 14 Jun 2023