Berjaya Food Bhd (Technical Buy)

• After gapping down from the prior day’s closing of RM0.825 to as low as RM0.63 on 19 May, BJFOOD’s share price hasretraced further subsequently before closing at RM0.57 yesterday.

• We believe that a technical rebound could be on the cards given that the MACD is on the verge of crossing above the signalline while the Stochastic indicator is in the midst of reversing from the oversold zone.

• The upward bias could then propel the stock to challenge our resistance thresholds of RM0.63 (R1; 11% upside potential)and RM0.70 (R2; 23% upside potential).

• Our stop loss price is pegged at RM0.51 (representing an 11% downside risk).

• Fundamentally speaking, BJFOOD is involved in the operation of restaurant and café franchise outlets (such as Starbucks,Kenny Rogers Roasters, Jollibean Foods etc) in Malaysia.

• The group posted net profit of RM15.9m (-50% YoY) in 3QFY23, which brought 9MFY23’s bottomline to RM86.1m (+5%YoY).

• Consensus is currently projecting the group to log a net profit of RM106.7m in FY June 2023 before rising further toRM112.1m in FY June 2024, which translate to forward PERs of 9.4x this year and 8.9x next year, respectively.

L&P Global Bhd (Technical Buy)

• Listed in early January 2023 at an IPO offer price of RM0.30, L&PBHD’s share price staged a strong breakout from adownward sloping resistance trendline yesterday to close at RM0.48.

• Technically speaking, the rising momentum could lift the stock higher ahead, backed by the bullish technical signals arisingfrom: (i) the emerging Parabolic SAR uptrend, (ii) the strengthening MACD, and (iii) the positive crossover in the DMIindicator.

• That said, the stock could rise to advance towards our resistance targets of RM0.53 (R1; 10% upside potential) and RM0.60(R2; 25% upside potential).

• Conversely, we have placed our stop loss level at RM0.43 (representing a 10% downside risk).

• An integrated industrial packaging solutions provider (serving mainly the Malaysia and Vietnam markets), L&PBHD registereda net profit of RM4.1m in 1QFY23 (compared to RM3.3m in 4QFY23) after delivering a full-year net earnings of RM14.7m inFY22.

• Based on its book value per share of RM0.15 as of end-March 2023, the stock is currently trading at a Price/Book Valuemultiple of 3.2x.

Source: Kenanga Research - 15 Jun 2023