Yes. The title is a bit exaggerating, but it is my intention to draw your attention to this little-known technology company which in my opinion – deserves more retail interest in it.
As we all know, the semiconductor is now facing the chip shortage problem, this is especially true in the electrical and electronics sector as well as automotive sector. Hence, everyone is chasing after chip-related technology companies and given them sky-high valuation.
But let us take a step back.
Did these “beneficiaries” of the technology boom truly shown result in good earnings? I do not believe so.
Recently, MI, VITROX, FRONTKN, UNISEM all shown a decrease in QoQ growth – despite them being the beneficiaries of the semiconductor boom. Do not get me wrong, this article is not to shun these aforementioned companies, but it was to pique your thoughts. Does this companies really worth to pay for a PE ratio of 50 to 70 times?
Or are there something else that is better in the market?
The short answer is yes.
I’ve been working in the corporate communication side, and had recently came across this company while they are presenting in the Annual General Meeting. I was amazed by the turnaround of the company and even astonished by the lack of recognition of this company!
This company is ARB BERHAD (7181), or formerly known as ATURMAJU RESOURCES BERHAD. ARBB is the only listed company in Malaysia that had successfully evolved from a dying lumber company to a super profitable IT solutions software company. The company focuses on software development especially in cloud customised ERP solutions, IoT related solutions and so forth. Basically, unlike the hardware players stacked in Penang, ARBB is a software orientated technology company with high growth.
As you can see, since the new management had begun turning around the business, ARBB is achieving crazy growth, its revenue had more than doubled despite the pandemic strangling the economy!
What’s more absurd – ARBB is only trading at 5.24 times PE ratio, approximately 8 – 9 times cheaper than the so called “technology” industry average PE ratio!
But for me – as a trader, I would prefer companies with strong technical movement. What about the technical part of ARBB?
As you can see, ARBB had triggered a “BUY” signal based on my technical indicators. The momentum for ARBB is also strong as MDEC targeted to have 875,000 MSMEs to adopt e-commerce by 2025. In other words, ARBB’s cloud business could be one of the theme play of the current trend.
Combining
both fundamental (cheap valuation) and strong momentum from adoption of
cloud-services in MSMEs, I believe ARBB could be the next TECHNOKING.
Would you like to join me on the launching of ARBB rocket?
https://klse.i3investor.com/blogs/TECHNOKING/2021-05-03-story-h1564255065-IS_THIS_COMPANY_THE_MALAYSIA_VERSION_OF_TECHNOKING.jsp
