In-Depth Analysis of Key Investment Opportunities: PAX Global Technology Ltd and Other Market Insights

Broker Name: CGS International Securities

Date of Report: December 6, 2024

PAX Global Technology Ltd: Resuming Its Upside

PAX Global Technology Ltd, listed under HKG 327, is a prominent player in the electronic fund transfer point-of-sale (EFT-POS) terminal solutions industry. The company focuses on developing and selling a range of countertop and mobile EFT-POS terminals that support various electronic payment types. Bloomberg highlights PAX Global’s potential for bullish continuation and an ongoing upward trend.

Technical analysis reveals several noteworthy pointers:

• PAX Global has formed and confirmed a large cup and handle formation, indicating a potential bullish trend.
• There is a breakout from the smaller falling wedge, confirming bullish continuation.
• Prices are trending above all Ichimoku indicators, with all indicators sloping upwards, reflecting strong momentum.
• The MACD/signal line is rising towards the zero line with a positive histogram.
• The Stochastic Oscillator is rising, confirming mid-term momentum.
• The 23-period Rate of Change (ROC) has risen above the zero line, confirming bullish momentum.
• Directional movement index confirms the bullish strength, with volume rising above 20-period averages.

Entry prices are set at 5.40, 5.00, and 4.75, with support levels at 4.77 and 4.11. The stop-loss is suggested at 4.35. Resistance levels are identified at 5.54 and 6.60, with target prices at 6.58, 7.20, 8.22, and 10.00.

Singapore Market Strategy: Navigating 2025

As Singapore approaches 2025, investors are advised to remain nimble as the market digests rising tariffs and trade uncertainties. The Singapore market offers a compelling CY25F dividend yield of approximately 4.1% and high return on equities (ROEs) between 12.3-12.4%.

The investment strategy revolves around three main themes:

• High-yield, high-growth stocks
• Value-up plays
• Interest rates and bond yields

The market is trading at a 13.6x CY25F P/E, with an MSCI SIN target of 409.3 points, translating into 15x CY25F earnings. Big-cap conviction picks include CLAR, IFAST, SCI, STM, ST, UOB, SATS, STE, YZJSGD, and KEP, while small-cap picks are CSE, HLA, PROP, and SPOST.

Key risks include fewer-than-projected interest rate cuts in the US and increased geopolitical and trade tensions, potentially dampening global economic growth.

Additional Insights from Indonesia and Hong Kong

MIDI Utama Indonesia is highlighted as an underrated alpha within its group, presenting potential opportunities for investors.

Ping An Bank’s regional financial conference takeaways reveal insights into the banking sector’s outlook, while Bank Central Asia’s takeaways from the CGSI Financial Conference provide further understanding of the Indonesian financial landscape.

Conclusion and Recommendations

This detailed analysis of PAX Global Technology Ltd and strategic insights into the Singapore market, alongside other key market takeaways, provide investors with a comprehensive understanding of the current investment landscape. It is crucial for investors to consider these insights and align them with their investment strategies to navigate the complexities of the global market effectively.