Insas

[winston]

not vested

Trading Buy: INSAS-3379
Hidden gem and a cheaper entry to INARI
(Last price: RM0.845, Potential upside +18.3%)

Company Profile

The Group’s principal business segments consist of:
(i) stock broking, provision of corporate finance & advisory services and structured finance (“Financial Services”);
(ii) investment holding & trading;
(iii) technology & IT related services (“Technology”);
(iv) retail trading and car rental; and
(v) property investment & development.

Trading Catalyst

INSAS valuations are compelling with share prices trading 68% and 71% below its BVPS of RM2.62 and RNAV of RM2.88 (despite applying a 30% investment holding discount), respectively.

We believe such steep discounts could provide sufficient margin of safety and cushion further price fall, thanks to the strong growth from its technology related divisions (predominantly from INARI) and stable earnings from its financial services and credit & leasing and retailing businesses as well as its solid balance sheet (with net cash/equivalent of RM390m or 56sen/share).

Given the abundant net cash (66% share price), INSAS has solid capacity to declare sustainable (or higher) dividends in future, despite prevailing headwinds.

Technically, the stock is ripe for further advance towards RM0.90-1.00 zones after staging triangle breakouts on the daily and weekly charts.

Technical View
Resistance: RM0.870 / RM0.900 / RM1.00
Support: RM0.815 / RM0.800
Cut loss: RM0.780

Key Financial Stats
Trading at 68% and 71% below its BVPS of RM2.62 and revised RNAV of RM2.88 (applying a 30% investment holding discount), supported by strong net cash/share of RM390m or RM0.56.

Source: Bloomberg, HLIB