not vested
Trading Buy: PESTECH-5219
(Last price: RM1.16, Potential upside +25.0%)
Company Profile
PESTECH (listed in May 2012) is a Malaysian integrated electrical power technology company specialises in the provision of comprehensive power system engineering and technical solutions for the construction of electric power assets.
Trading Catalyst
PESTECH is likely to ride on the fast growing regional demand for electricity and rail related infrastructure.
In Malaysia, the continuation of ECRL, LRT 3, and the pending RTS projects presents positive prospects for further involvement in rail electrification in addition to its current on-going projects. Regionally, the Thailand 3-airports high speed rail link, and Philippine National Railways Clark 1 projects are the major infrastructure undertakings that PESTECH may explore for further growth potential in rail electrification.
The stock is trading at undemanding valuations at 8.5x FY20 P/E (27% below 10Y average 11.7x) as well as 1.71x P/B (10% below 10Y average of 1.9x), supported by current order book of RM1.8bn.
Technically, the rounding bottom formation bodes well for PESTECH to retest RM1.29-1.45 in the mid to long term.
Technical View
Resistance: RM1.19 / RM1.29 / RM1.45
Support: RM1.10 / RM1.06
Cut loss: RM1.05
Key Financial Stats
Trading at 8.5x FY20E P/E (27% below 10Y 11.7x) and 1.7x P/B (10% below 10Y 1.9x), supported by RM1.8bn orderbook.
Source: HLIB