Today, i would like to revisit one of the stock that i've covered earlier on - Pecca (5271).
For those of you who would like to view back my blog regarding this stock, the link would be as follow:
https://klse.i3investor.com/blogs/Shouldilookatit/2020-07-24-story-h1510698344-Is_venturing_into_PPE_a_good_option.jsp
Since my last post on this stock, the stock has surge 32 cents to RM1.22 (35% upside). As such, i would like to revisit on this stock again to see if there is any buying signal to enter.
Some of the key abstract from HLInvest Research
1) Production for leath leather car seats has normalised to 10-11k sets/month and the volume is expected to sustain until end of the year.
Views: The lockdown during March has greatly impacted Pecca's earning for the year. However, with the upcoming launch of Proton's X50 and Perodua's SUV, this will greatly improve Pecca's bottom line and recoup some of the losses. Should the leather car sears normalised to Pre-Covid, Pecca is expecting a higher growth in the upcoming quarter (along with the sales of face masks).
2) Production in 3-ply mask to be ramp up to 25m/mth (300m/yr) by end 1QFY21 and 50m/mth (600m/yr) by end 2QFY21. Pecca has obtained ISO Certification and it is awaiting for export permit from U.S. FDA and CE Marking.
Views: With the RMCO extended to end of the year and the vaccinne/cure is nowhere near completion, Pecca's venture into mask and PPE would contribute greatly into its book. Should the green light be given by FDA and CE Marking, it would be great news for Pecca. From what we've seen previously, stocks that have ventured into PPE would skyrocket once the news of clearance has been released. As such, i would want to keep an eye on Pecca regarding this.
With all that said, i would like to revisit the chart for Pecca to see if any of the buying pattern emerges.
Technical Chart
Looking at the chart, Pecca is standing above its 7,14, 100 days moving average. Volume has been increasing steadily.
As long as the chart does not break its Moving Average, i think it would be a good opportunity to enter. While previously it has manage to achieve a new high of 1.35, it closes red thereafter. This is not a good sign as there is a remarkable volume but it is unable to sustain at 1.30.
However. on an overall basis, it is building an upward momentum and the stock will once again retest it's high of 1.35. Once this resistance has been broken, we will see the price going north. With HLIB issuing a TP of RM1.75 (30% upside from 1.22), i would definitely keep this stock on my watchlist to monitor further.
*I'm just a newbie in this field and this is just my thoughts. My views are not a buy/sell call. This is just my 2 cents on this counter.
Credit to: HLIBResearch (attached the link to the article should any of you would like to refer)
https://klse.i3investor.com/blogs/hleresearch/2020-09-04-story-h1513319088-Pecca_Group_Double_Happiness_SST_PPE.jsp
