Since its whirlwind listing in April, Farm Fresh’s share price has fallen 15% this year from its 52-week high of RM1.86 to close at RM1.58 yesterday.
With the share price finding support near its 52-week low of RM1.50, Kenanga feels there is a technical rebound to be anticipated. Chart-wise, the research house believes the share price will shift upward as both the Stochastic and RSI indicators climb out from the oversold zone. Hence, it expects the stock to rise and test resistance thresholds of RM1.74 and RM1.80 which is a 10-14% upside.
Conversely, the stop loss price has been identified at RM1.42 (representing a 10% downside risk). Business-wise, FFB is engaged in the business of farming, manufacturing, and distributing various dairy products and plant-based products. Earnings-wise, the group reported a net profit of RM15.2m in 1QFY23 compared with a net profit of RM19.2m in 1QFY22,
mainly due to the Employees’ Share Option Scheme expenses of RM2.1m which was first recognised during the
current quarter upon the grant of share options to employees of the Group
Based on consensus forecasts, FFB’s net earnings are projected to come in at RM92m for FY March 2023 and RM115.6m
for FY March 2024, which translates to forward PERs of 31.9x and 25.4x, respectively.
