AWC Berhad (AWC) was first highlighted in this blog on 8 December 2023 as a very good fundamental stock with a good technical chart to boot. More positive drivers have since come into play and warrants an update.

1) EARNINGS HAS SHOWN MASSIVE IMPROVEMENT

Latest Quarterly Results have been stellar with a profit of RM5.8 million, a big jump from a profit of RM467,000 the quarter before. This represents a jump of 1150% QoQ! With the consolidation of Stream’s profits, AWC’s bottomline is expected to improve further from Q42024 onwards. According to RHB Investment Research forecast, AWC is trading at a very compelling F25FYE ex cash of only 5X!

2) CHART IS VERY CONSTRUCTIVE

AWC price has been on the ascend ever since it made a significant swing low at RM0.45 in September 2023. It has since been on a new uptrend, moving into a nice channel with the lower boundary well defined at the RM0.60 and the upper boundary capped at RM0.70 level. Today, the price has catapulted above the upper boundary and is clearly testing the next resistance level at RM0.76, A close above RM0.76 would open the doors to test the next significant resistance at RM0.90. Judging from the current momentum of this move we could see the longer term target of RM1.17 be realised, seeing the strength of today’s volume breakout gap-and-run move.

3) PRICE MOVING UP IN GFM BERHAD

Stock price of GFM Bhd, which is in the same space of facilities management business has been on a tear this year. Trading at RM0.38 it is up 38% year-to-date vs AWC Bhd, which is only up 18% year-to-date.

CONCLUSION

AWC has shown considerable improvement in the most recent financial quarter. They are expected to improve further in the second half of the year with the full recognition of Stream Sdn Bhd’s profits. Technical charts point to little resistance until RM0.90 and further up will see a retest of  2017 highs at RM1.17. 

Disclaimer: This blog is created for sharing of trading ideas only. It is not in any way or form meant to be an inducement or recommendation to buy or sell any stocks. Consult your financial consultant before making any financial investments