Betamek Bhd could be bottoming out and breakout above the short term resistance range of 43 sen, and traders could see it reached up to 49 sen, according to Malacca Securities.
“The stock has maintained a consistent range between 40 sen and 43 sen over the past one month. We believe it could be bottoming out and traders could monitor for a breakout above the short term resistance of 43 sen.
“Should it breakout above this level, next target will be set around 46 sen and 49 sen. Notably, the current support level is pegged at 39 sen,” said the research house in its Technical Focus note today (Dec 5).
Malacca Securities said Betamek showcased a growing revenue and earnings in its 2QFY24 quarterly report, with its net asset (NA) per share increased to 32 sen from 31 sen for the quarter.
The company has been trading at a P/E around 10x, which is relatively lower as compared to its counterparts such as EG Industries Bhd (P/E: 17.5x) and V.S. Industries Bhd (P/E: 18.8x).
In July 2023, Malaysian Automotive Association (MAA) revised upwards their forecasted Total Industry Volume (TIV) for 2023 from 650,000 to 725,000 units for 2023.
“For 9M23, Perodua has recorded sales for 233,227 units, an increase of 18.78% YoY as compared to last year of 196,354 units sold.
“On the other hand, Proton also recorded a noteworthy YoY increase of 14.1%, having sold a total of 116,836 units over the same nine-month period in 2023.
“This may benefit Betamek as they supply various electronics parts to Perodua,” the research house added.
Additionally, it said the MoU between Betamek and Shenzhen Zhonghong Technology Co. could provide synergy and produce new products going forward, which is likely to translate to future revenue growth of the group.
“It is set to significantly enhance the company’s outlook. This strategic move involves the acquisition of new technology, technical know-how and access to new resources and customer base (which would translate into revenue).”
