E.A. Technique Berhad (EATECH) is primarily involved in the business of marine transportation and offshore storage of oil and gas, as well as the provision of port marine services. EATECH fell into PN17 status in 2022 after its shareholders’ equity dropped below 25% of its share capital base of RM179.76 million as of 31 Dec 2021. 

What has happened since EATECH slipped in PN17? Back in November 2023, Voultier Sdn Bhd (VSB) announced its intention to rescue EATECH by proposing a plan to subscribe to 676.39 million new shares or a 51% stake in the company through a share issuance exercise. VSB is largely owned by businessmen Datuk Wira Mubarak Hussain Akhtar Husni (70%) and Dato' Lai Keng Onn (30%), respectively. Dato' Lai is the Managing Director and founder of Kinergy Advancement Berhad, a main board listed sustainable energy solutions company with a market capitalisation of RM705 million.

On June 27 2024, VSB officially completed the acquisition of the 51% stake in EATECH with the subscription of up to 795.75 million shares at RM0.10 per share. On completion of the share issuance will also see the emergence of Johor Corp as the second largest shareholder with a 21% stake via  Sindora Bhd and Kulim Bhd.

TECHNICAL OBSERVATIONS

Daily chart reading puts EATECH in consolidation mode, finding good support at current levels after bouncing off the lower boundary of the uptrend channel (currently around RM0.33) which has been in place since August 2023. The highest probability pattern we can interpret from this is an eventual move back to test the upper boundary of the uptrend channel which currently sits at the RM0.46 level, provided that the uptrend channel is not broken on the downside, which would invalidate this interpretation.

Looking at the longer weekly chart, EATECH had broken above the downtrend line which has been in effect since Dec 2016. This is significant as it not only pierced through the downtrend line since April 2024 but has stayed above it ever since, indicating that a new uptrend has begun. As for longer term resistance, if it should break the recent high of RM0.46, we can aim for longer term targets of RM0.70 and RM1.00.

SUMMARY

EATECH could be a stock to watch with the completion of the new acquisition by the new substantial shareholders last month. Markets will be watching with great anticipation on what plans they will unveil for the company. The next milestone would also be the uplifting of EATECH’s PN17 status, which is expected to give a nice jolt to the share price based on past stocks in a similar position such as COMCORP and AIRASIA X. 

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