COMCORP (7195) - Comcorp - On a Green Turn

COMCORP (7195) - Comcorp - On a Green Turn

Apr 25, 2014

The US market had finally conquer above 16500 and could possibly mark a new leg of the bull for the coming few weeks. As of current, the DJIA is trending at 16518, marking a successful penetration above the resistant as analyst are looking forward for a better employment data in the coming week. Overall global market had bullish, however, still in a cautious manner.

While the local market had been in a strong hype in property counters and palm oil related counters during the year 2014, Comintel Corporation Berhad (Comcorp - 7195) had certainly not left away from my sight after seeing this company starting to turning in a green loop.

Let's have a quick look on Comcorp latest chart.

It can be seen that Comcorp had recently saw attractive volume starting to flood into the company after recording a breaking volume of 4.5m on 11th April 2014, the highest volume recorded in the past 3 year. The recent consolidation at the range of RM 0.20 to RM 0.22 should be seeing saturation and will be ready to see a new break out in the coming days along with a stronger volume that will be sending Comcorp shares above RM 0.22.

Comcorp turning into green

While Comcorp financial might still be laying in the blues of red sea, however, it could be heading for a better turn in the coming days as Comcorp is refocusing their asset and resources into green renewable energy as the global market starts to see demand in green technology, especially green renewable energy.

The motion is further motivated by the government by setting up a RM200m fund through MDV to disburse a maximum of RM 10m for 20 successful applicant that comes out with green solution in Energy, Water & Waste water, Air & Environment, Advanced Material, Transportation, Manufacturing & Industrial, Agricultural & Nutrition, and Recycling waste.

Comintel Green Technologies Sdn Bhd had on last year December 2013 secured the financing from MDV to pattern and roll out their Biomass process which will be the turnkey for the company this year.

In order to strengthen their financial ratio for the project, Comcorp had recently entered into an agreement to sell their existing land and building to AmanahRaya Reit for a consideration of RM 30m which will immediately pare down their debts by half. The selling of the property will also be directly reflecting into a EPS of 21 cents (RM30m / 140m shares) gain for the FYE 2014 result.

Comcorp will be looking to turnaround the company this year after looking set to eye some projects tie up in the robust ICT environment. Comcorp might be getting some lucrative projects in the coming days.

I believe Comcorp will be an interesting company to look upon. With a NTA of RM 0.6835, the current price of RM 0.205 is around 70% discount to the NTA. Shall Comcorp starts to deliver from their green technologies sector, we will be looking out for Comcorp in delivering a better result in the coming days. A short term outlook might see Comcorp looking to challenge RM 0.25, while a longer term will see RM 0.30.

Bone's short term TP : RM 0.25

Cheers and regards,
Bone