by winston » Mon Jan 25, 2021 9:26 am
not vested
HEVEA (RM0.65 – BUY- HLIB RESEARCH TP RM0.83) – Potential downtrend line breakout
Continue to shine. Hevea risk-reward profile is more attractive now after tumbling 22% from its 52-week high of RM0.835 to RM0.65 last Friday, supported by undemanding valuations of 12.3x (ex NCPS of 18.5sen or ~28% to share prices) FY21E P/E (vs 5Y mean of 15.1x) and 0.88x P/B (20% below 5Y mean of 1.1x), coupled with a strong 19% EPS CAGR from FY19-22
We expect Hevea to post a seasonally better 4Q20 results particularly in the RTA division, benefitting from pent-up demand, stocking up activities and work-from-home arrangements as a result of disruption of supply chain and trade diversions
However, growing pressures from stronger RM, higher freight costs and raw material prices remain a challenge to the group
R1-R2: 0.69-0.72
LT objective: 0.80
S1-S2: 0.61-0.60
Cut: 0.58
Source: HLIB
It's all about "how much you made when you were right" & "how little you lost when you were wrong"