Malaysia Retail Research Insights: December 3, 2024

Date: December 3, 2024

Broker: CGS International

Introduction to the Report

This comprehensive analysis from CGS International on Malaysia’s retail sector provides a deep dive into the performance and potential of several key companies. The report offers actionable insights for investors and highlights the trends shaping the Malaysian market.

Company Analyses

Sime Darby Property (5288)

Sime Darby Property Berhad is making waves with its new short-term uptrend. The company’s stock, which provides property development and investment services, has recently broken out of a four-month triangle pattern. This breakout, coupled with a bullish candle and increased trading volume, signals the potential for a new uptrend. Key technical indicators such as the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) are strengthening, suggesting a build-up in buyer strength. Aggressive traders might consider buying at RM1.45-1.50, with a stop-loss set at RM1.33. Potential resistance levels are identified at RM1.56 and RM1.67, with a target set at these levels.

Mi Technovation (5286)

Mi Technovation Berhad, a holding company involved in the semiconductor industry, is resuming its longer-term uptrend. The stock has shown a strong performance after breaking through the 200-day EMA, supported by a higher trading volume. The breakout of a three-month-long triangle indicates that the bullish momentum is gaining strength, as evidenced by the positive MACD and RSI indicators. Investors are advised to consider buying between RM2.10-2.17, with a stop-loss at RM1.98, targeting resistance levels at RM2.28 and RM2.39.

Hibiscus Petroleum Bhd

Hibiscus Petroleum Bhd is poised for a long-term rerating, driven by multiple projects. The company has been noted for its strategic projects at North Sabah and Teal West, alongside the potential extension of the PM3 CAA PSC tenure. The report suggests initiating an ‘Add’ with a target price of RM2.81 for end-CY25F, indicating a positive outlook despite current macroeconomic risks. The stock’s price reflects long-term Brent oil prices under US\$60/bbl, contrasting with the current prices of over US\$70/bbl.

Bank Islam Malaysia Bhd

The strategy note for Bank Islam Malaysia Bhd highlights financing growth expected to pick up in the fourth quarter of 2024. The recommendation is to maintain an ‘Add’ with a higher target price of RM3.13, suggesting confidence in the bank’s growth trajectory and financial health.

RHB Bank Bhd

RHB Bank Bhd is navigating a downcycle in LLP, yet the report maintains an ‘Add’ with an increased target price of RM7.25. This suggests a positive outlook on the bank’s capacity to manage the downcycle and leverage opportunities for growth.

Technical Analysis and Market Trends

FBMKLCI Index

The FBMKLCI Index shows a downward bias, with the last recorded price at 1,595.48. The index is supported by the 200-day EMA and a double bottom low at 1,587-1,589. However, a close below these levels could signal further weakness. Immediate resistance levels are identified at the 20-day and 50-day EMAs, followed by the 1,614-1,624 level.

Conclusion

This report by CGS International provides key insights into Malaysia’s stock market, offering detailed analysis and recommendations for several prominent companies. Investors are encouraged to consider these analyses when making strategic investment decisions.