KUALA LUMPUR (May 18): Kenanga Research said Coraza Integrated Technology Bhd shares have since recovered to close at 81.5 sen on Wednesday (May 17).

In a daily technical highlights note on Thursday, the research house said with the share price likely to have found its key support at 75.5 sen, a technical rebound could be anticipated.

“Chart-wise, we believe the share price will plot an upward trajectory in view of the strengthening Stochastic and RSI indicators coupled with the 12-day moving average hovering above the 26-day moving average following the MACD golden cross yesterday (Wednesday).

“Hence, we expect the stock to rise and test our resistance thresholds of 90 sen (R1; 10% upside potential) and 95 sen (R2; 17% upside potential),” it said.

Kenanga said that conversely, the stop loss price has been identified at 73 sen (representing a 10% downside risk).

It said as an engineering support services provider, Coraza is mainly involved in the business of manufacturing metal sheet parts and precision machine components, servicing clients from various sectors including semiconductor, instrumentation, life science etc.

“Earnings-wise, the group reported a net profit of RM4.3 million in 4QFY2022 compared with a net profit of RM3.9 million in 4QFY2021.

“This took FY2022 bottomline to RM14.7 million (versus net profit of RM12.8 million previously).

“Based on consensus forecasts, Coraza’s net earnings are projected to come in at RM16.4 million in FY December 2023 and RM20.5 million in FY December 2024, which translate to forward PERs (price-earnings ratios) of 21.3 times this year and 17.1 times next year, respectively,” it said.