Kenanga Research & Investment

Daily Technical Highlights

Publish date: Thu, 08 Jun 2023, 09:51 AM

LGMS Bhd (Technical Buy)

• Listed in early June 2022 at an IPO offer price of RM0.50, LGMS shares retraced subsequently by 36% from the high ofRM1.43 in late-April 2023 to as low as RM0.915 on 6 June 2023 before inching up to close at RM0.935 yesterday.

• Following which, a technical rebound could be on the horizon in view of the positive technical signals as suggested by theRSI’s reversal from the oversold zone and the share price’s crossing back above the lower Bollinger Bands.

• That said, the stock will likely climb towards our resistance thresholds of RM1.04 (R1; 11% upside potential) and RM1.13(R2; 21% upside potential).

• Our stop loss price is pegged at RM0.84 (representing a 10% downside risk).

• Business-wise, LGMS is an independent provider of professional cybersecurity services, focussing on cybersecurityassessment and penetration testing, cyber risk management and compliance as well as the provision of digital forensics andincident response services.

• Post-listing, the group reported a net profit of RM1.6m in 1QFY23 (compared to RM3.1m in 1QFY22) after registering amaiden full-year earnings of RM11.5m for FY22.

• Based on fundamental analysis, Kenanga Research is expecting LGMS to register stronger net profit of RM14.2m for FYDecember 2023 before rising further to RM24.2m in FY December 2024.

• From a valuation standpoint, this translates to forward PERs of 30.2x this year and 17.6x next year, respectively.


PT Resources Holdings Bhd (Technical Buy)

• PTRB’s share price has been trending down from RM0.52 in mid-April 2023 to RM0.395 on 25 May 2023 before bouncing offfrom the intermediate support level to close at RM0.42 yesterday.

• Chart-wise, we believe the stock is set to overcome an intermediate descending resistance line backed by the ongoingParabolic SAR uptrend as the MACD has crossed above the signal line.

• Ergo, the price upward bias could lift the stock to challenge our resistance thresholds of RM0.47 (R1; 12% upside potential)and RM0.52 (R2; 24% upside potential).

• Conversely, we have placed our stop loss level at RM0.37 (representing a 12% downside risk).

• PTRB is engaged in the processing and trading of frozen seafood products, catering to both the domestic as well asinternational markets (namely Saudi Arabia, China and Philippines).

• The group posted a net profit of RM2m in 3QFY23 (compared to RM8.3m in 2QFY23), which brought its 9MFY23’scumulative earnings to RM17.8m (no prior period comparison was available as the Company was only listed on the ACEMarket in late-September last year at an IPO offer price of RM0.36 per share).

• Based on its book value per share of RM0.26 as of end-January 2023, the stock is currently trading at a Price/Book Valuemultiple of 1.6x.

Source: Kenanga Research - 8 Jun 2023

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