not vested
Trading Buy: KPOWER-7130
Look forward to a successful transformation and exciting growth ahead
(Last price: RM1.88, Potential upside +33.0%)
Company Profile
From a manufacturer of warp-knitted fabrics and property developer, KPOWER has repositioned itself to venture into energy, utilities, infrastructure, and logistics businesses.
Trading Catalyst
Spearheaded by the founder of SERBADK, Mohd Abdul Karim Abdullah (who bought a 53% stake in June 2019), the Company is repositioning itself across diverse areas in energy, utilities and construction industries to generate sustainable concession based revenue streams, leveraging on the management’s vast experience and industry network.
KPOWER’s risk-reward profile is attractive after skidding 40% from a 52-week high of RM3.11 to RM1.88 last Friday or 6.3x FY21E (30% discount vs peers), supported by RM1bn order book (mainly encompassing infrastructure, energy and facilities projects) and RM2.5bn tender book (Middle East: RM1.2bn; Malaysia: RM908m; Indonesia RM276m and Loas RM180m).
Technically, the stock is poised for a bullish triangle breakout formation to spur prices further towards RM2.16-2.50 territory.
Technical View
Resistance: RM2.00 / RM2.16 / RM2.50
Support: RM1.80 / RM1.72
Cut loss: RM1.68
Key Financial Stats
Undemanding 6.3x FY21 P/E, supported by RM1bn orderbook and RM2.5bn tenderbook, and RM4.3 m netcash or 5sen/share.
Source: Bloomberg, HLIB