A NEW GROWTH THEME IN BURSA - PRECISION MACHINING!
Hey everyone, we are back, and this time with a very interesting topic that triggered our interest. As usual we promise to keep it simple for you.
In this article we will be talking about a new theme that as sparked the interest of many, the PRECISION MACHINING THEME.
If you are confused about this name, then track back which stocks have been gaining a lot of attention recently and even hit LIMIT UP even market sentiments are bad?
Yes we are referring to these stocks : HIGHTEC, WIDETEC, and KOBAY. Can we still invest here? Price already so high laaa...
Before we answer that question, lets understand about this industry.
What is Precision Machining or CNC (Computer Numerical Control) Machining?
Basically it involves the use of highly sophisticated machines which combines software planning (CAD models) and translates the model created in computer to create parts with high precision. Well, we know it is still difficult to digest this. To make it easier, you can view the explanation video here :
While we are reading on this, we understood that this industry is leading towards two majorly sought out items in the world today apart from ESG : Automation which leads to Cost Optimisation
If you have watched the video in the link above then you need to know to which industry is this CNC Machining beneficial for? There are 7 Key Industries around the world that are benefiting from CNC Machining
Besides that, there are also other growing industries applying CNC machining to their advantage, notably the EV sector.
Source : https://www.steckermachine.com/blog/cnc-machining-industry-outlook
Is the demand for this manufacturing intelligence really growing?
Lets take a look at the Quarter Reports of some of this high flying company
So it is obvious where the source of growth is coming from : This sector has a DIRECT CORRELATION with the Electric and Electronics industry and others.
We would like to classify this sector as an essential SUPPORT sector to the growing industries in the world. With global economic recovery and innovations of industries with new technology, this Precision Machining sector will have a big role in automation and cost optimisation.
So is there still upside to this Sector?
In our opinion, definitely a yes. However, the recent rally has pushed up the share price steeply and probably have a little more upside to take advantage of. The price may come to a correction soon before resuming its growth trajectory for the longer term.
So we view this as a short term trading opportunity due to the high momentum and long term watchlist for growth opportunities. Since most stocks are at a new high, kindly use the Fibonacci Extension levels to predict the next potential resistance zones.
Below is an example (not a Buy/Sell Call): The next Fibo extension level for KOBAY is at RM4.01
What stocks in Bursa Malaysia that we need to be aware of in this theme that recently has gained interest?
So, we hope that you have learnt something from this article. Kindly apply your Fundamental and Technical Analysis before making any decisions to buy and sell.
We have more for you! Follow us in our Telegram Channel @StockAdvisor FBMKLCI for more updates in Bursa Malaysia on a daily basis!
Disclaimer : All notes expressed here are solely individual point of views and we are not responsible for any buy or sell decisions made by others. Kindly use this as a reference reading material to add value to your current research and please verify any information stated here with a licensed individual in the capital markets industry before making any decisions.