Date/日期 : 15/1/2020
Price/现价 : RM1.13
Target price/目标价: RM1.25/RM1.36
Cut loss/止损价 : RM1.09
**Validation: Bullish Resurgence Formation
• The share price has made a higher low structure with testing of RM1.20 high yesterday, which indicates strong accumulation within a certain price range. This has been supported by strong volume since early Dec 2019 until yesterday.
• The stock is likely to rally before the end of this week or next week because the daily MACD histogram has been hovering in positive territory; with a high possibility to expand, which means there will be a potential upside in the share price.
• DMI+ has improved and still above ADX. This means the final phase of accumulation has already started with potential stronger buying momentum to come soon that will push the share price higher.
• RSI has also improved and made a higher low structure as well and still below the overbought level.
• The group’s earnings growth will stem from the group’s effort to replicate its offerings in the region and help to reduce the group’s reliance on the local market.
• The Group has been awarded for the implementation of the Tax Monitoring Programme in 30 more cities in Indonesia from 1 year to 3 years and it is renewable upon expiry. Given this project has exceeded the Group’s initial targets and the roll-out will be faster and require lower capex than previous expectations, THERE COULD BE POTENTIAL POSITIVE EARNINGS SURPRISE TO ANALYSTS’ FORECAST FOR FY20 AND HIGHER TARGET PRICE. Currently, all CIMB, BIMB and MIDF have BUY call on Myeg with TP of RM1.96, RM1.70 and RM1.49 respectively!
• While investors and fund managers are still obsessed with overrallied Dsonic, they might be overlooked and underestimate this Myeg’s earnings growth story from the region that may attract them to switch to super cheap Myeg. The case could be the same with Dayang, which Dayang has delivered more than what analysts’ forecasts and investors’ expectations except for KYY that led to a super bull rally in Dayang’s share price. Therefore, we could expect Myeg's share price to make CNY rally more than RM1.20 on the potential positive earnings surprise!
• Additionally, the latest progress in the commencement of the first phase of its online services in partnership with Land Bank of the Philippines, which to offer e-govt services to the people of the Philippines in transacting with the government
• The Group’s business model remains attractive which garner a healthy profit margin of about 50%.
• Treasury shares (shares buyback has been increasing by more than 100% in 4QFY19 from 4QFY18)
• Strong net cash and generous dividend payout company!