Eco World International Bhd (Technical Buy)

• From a low of RM0.245 in October 2022, EWINT’s share price has surged 167% to its peak of RM0.655 in June this yearand closed at RM0.585 last Friday. With the share price currently hovering near the lower end of a channel, a continuousupward trajectory is expected.

• The share price is expected to show an upward bias ahead, backed by both the Stochastic and RSI indicators which are setto unwind from the oversold zone.

• Thus, we believe EWINT’s share price will rise to challenge our resistance thresholds of RM0.65 (R1; 11% upside potential)and RM0.70 (R2; 20% upside potential).

• Conversely, our stop loss price has been identified at RM0.52 (representing an 11% downside risk).

• Fundamentally speaking, EWINT – which core business involves property development outside Malaysia mainly in theUnited Kingdom and Australia – aims to declare a first tranche dividend of at least RM300m in the near term while workingtowards achieving the RM900m total distribution target set for 2023.

• Earnings-wise, the group reported a narrowed net loss of RM4.6m in 2QFY23 compared with a net loss of RM67.4m in2QFY22, mainly due to higher foreign exchange rates and interest income. This took 1HFY23 net loss to RM35.4m (versusnet loss of RM82m previously).

• In terms of valuation, the stock is currently trading at Price/Book Value multiple of 0.6x (or approximately at 2 SD above itshistorical mean) based on its book value per share of RM1.02 as of end-April 2023.

Malakoff Corporation Bhd (Technical Buy)

• MALAKOF’s share price has fallen 32% since September 2020 from its peak of RM0.84 to close at RM0.575 last Friday. Withthe share price currently fluctuating near its 52-week low of RM0.575, a technical rebound from an oversold position isanticipated.

• Chart-wise, we believe the share price will shift upward as: (i) Parabolic SAR is on a rising trend, (ii) the RSI indicator is in themidst of climbing out from the oversold zone, and (iii) the 12-day moving average is still hovering above the 26-day movingaverage following the recent MACD golden cross.

• An upward shift could then propel the stock towards our resistance targets of RM0.64 (R1; 11% upside potential) andRM0.70 (R2; 22% upside potential).

• Our stop-loss level is pegged at RM0.52 (representing 10% downside risk).

• Fundamentally, MALAKOF is involved in the design, construction, operation & maintenance of combined cycle power plant,power generation and sale of electricity.

• Earnings-wise, the group reported a net loss of RM99.1m in 1QFY23 compared with a net profit of RM27.5m in 1QFY22,primarily due to higher weighted average fuel costs coupled with higher operating insurance costs.

• Based on consensus forecasts, MALAKOF’s net earnings are projected to come in at RM172.4m in FY December 2023 andRM293.3m in FY December 2024, which translate to forward PERs of 16.3x this year and 9.6x next year.

Source: Kenanga Research - 26 Jun 2023