Dagang Nexchange Bhd (Technical Buy)

• DNEX’s share price has pulled back from the peak of RM0.695 in February 2023 to a low of RM0.37 in May 2023 that wasfollowed by a subsequent rebound to close at RM0.52 yesterday.

• Riding on the rising Parabolic SAR trend as well as the bullish crossovers by the DMI Plus above the DMI Minus and theMACD above its zero line, the share price will likely extend its upward trajectory ahead.

• Hence, the stock could climb further to challenge our resistance levels of RM0.60 (R1; 15% upside potential) and RM0.655(R2; 26% upside potential).

• We peg our stop loss price at RM0.45, representing a downside risk of 13%.

• DNEX is involved in the provision of information technology solutions and e-services for trade facilitation, as well as in thebusiness of semiconductor and oil & gas / energy sectors.

• Earnings-wise, the group recorded a net loss of RM239.8m in 3QFY23 (vs. net profit of RM51.6m previously), which brought9MFY23 net loss to RM166.2m (vs. net profit of RM389m in 9MFY22).

• Nonetheless, based on consensus estimates, DNEX is expected to turn around with net profit of RM157.5m in FY June2023 and RM209m in FY June 2024, which translate to forward PERs of 10.4x and 7.9x, respectively.

MAG Holdings Bhd (Technical Buy)

• MAG’s share price – which has been consolidating within a range of RM0.17 to RM0.19 since July 2022 – spiked uprecently to break through its intermediate resistance level.

• Chart-wise, the stock is expected to shift higher backed by a rising Parabolic SAR trend and the strengthening MACDsignal.

• Thus, the stock could climb further to challenge our resistance levels of RM0.255 (R1; 13% upside potential) and RM0.28(R2; 24% upside potential).

• We peg our stop loss price at RM0.20, representing a downside risk of 11%.

• MAG is involved in the production of aquaculture-based food and trading of ready-to-consume seafood products.

• Earnings-wise, the group recorded a net profit of RM8.2m in 3QFY23 (+11% QoQ), which brought 9MFY23 net profit toRM23.8m (+20% YoY).

• Based on its book value per share of RM0.49 as of March 2023, the stock is currently trading at Price / Book Value multipleof 0.46.

Source: Kenanga Research - 16 Jun 2023