MY TOP “HIDDEN” STOCK PICK FOR THE CONSTRUCTION SECTOR RALLY
Alongside with global recovery stemming from reduced number of confirmed cases of COVID-19, majority of Malaysia Equities – in particularly the property and construction sector. This is supported by the fundamental factors where MCO would no longer hinder the progressive construction activities.
And in simpler terms, without MCO, the earnings of construction and property companies would go up.
If you studied the movement pattern of our construction sector, you’d notice a consolidation pattern towards uptrend breakout. This is truly interesting case study for investors.
However, there was one stock stood above all in terms of earnings and valuations. This company would be AGESON BERHAD (KLSE:AGES). The latest financial results of AGES had shown that the company achieved MYR 44.7 Million in revenue and MYR 12.4 Million in PAT respectively. This translates to a net profit margin of 27.71% - which is way above average of the industrial norm of 5% - 6% net profit margin!
Moreover, AGES had achieved this result amidst the second wave of MCO implemented by the government, where majority of the construction activities are halted – which in turn damaged the profitability of construction companies.
Sadly, no change of share price had been done after the result announcement by the company. I believe this is due to lack of publicity for AGES as majority of the investors do not understand the true value of this company. That being said, we still see strong support at 12.0 cents – 13.0 cents with decent traded volume.
AGES had also announced to issue new ICULS to finance the new joint venture development with MBI Kedah for a project of over a billion in GDV. The project is poised to continuously support the financials of AGES for the next 15 years to come. In other words, AGES will continue to grow for the next 15 years!
The current phase of stock price movement is commonly known as “collection phase”. Where lower volume and traded activities as well as a consolidation in price between 12.0 cents – 14.0 cents had shown someone buying aggressively. If you could, collecting below 13.0 cents would be a definite win and free profit from ICULS!