AWC Berhad (AWC) is a stock that we have blogged about since December 2023 when it was trading at RM0.64. AWC provides integrated facilities management and engineering services that has established itself as a leader in sustainable and infrastructure solutions.

CATALYSTS AND FUNDAMENTAL DRIVERS​

1) New upcoming projects in Nusantara and Neom City​

AWC’s fully owned subsidiary Stream aims to secure contracts for automated waste collection systems (AWCS) in Nusantara and Neom City, Saudi Arabia. According to RHB research, both mega projects make AWCS infrastructure compulsory with Nusantara and Neom City covering an area of over 600,000 acres and 6.5 acres respectively.

2) Higher profits following the full acquisition of Stream Sdn Bhd

The remaining purchase of the remaining 49% interest in Stream Group Sdn Bhd will enable AWC to capture the significant growth phase in Stream’s business as well as fully recognise the subsidiary earnings.

3) Increasing use of AWCS by property developers and Singapore HDB projects

AWC has always had presence in Singapore’s HDB projects and more contracts are expected to go AWC’s way with the recent mandate from the Singapore government that AWCS be the waste water solution for HDB and private housing projects exceeding 500 units.

TECHNICAL INTERPRETATION

From an Elliott wave perspective, AWC meets the criteria of being on the Motive and most powerful Wave 3 move after taking out the previous Wave 1 high of RM1.20. The chart structure is is so well defined even Ralph Nelson Elliott would have been proud! 

From the daily chart, we can see the start of Wave 1 starting from the RM0.55 level in Feb 2024, moving in 5 subways and peaking at RM1.20 on 23 May 2024. Then the subsequent Wave 2 with its 3 subways ending at the pivotal and crucial psychological support of RM1.00.

So, according to Elliot wave principles, wave 3 which has just begun, can be deemed to have started from 2 July 2024 from the RM1.00 level. So how high can this wave potentially go? Based on Elliot theory the wave 3 move has to be at least equal and surpass the magnitude of the wave 1 motive move. In this case the wave 1 move length was RM0.65, giving a well defined minimum target on this current move to at least RM1.65!

SUMMARY

With a host of positive catalyst in the pipeline coupled with explosive price action, we are optimistic that AWC continue outperforming the market and potentially be one of the best performing stocks for 2024! With these positive attributes, AWC could be world class company in the making with the potential to be a billion ringgit market capitalisation company in the future.

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.