KUALA LUMPUR (Oct 23): Shares in Frontken Corp Bhd rose 1.63% in the mid-morning today following a positive technical outlook for the stock as well as its prospects in the 5G sphere going forward.
At 10.39am, Frontken had risen six sen to RM3.74, with a market capitalisation of RM3.94 billion.
Kenanga Research said Frontken is poised to tag along Taiwan Semiconductor Manufacturing Company (TSMC) and ride the global 5G roll-out.
In a daily technical highlights note today, the research house said that in addition, TSMC had raised its 2020 revenue forecast by about 30%, compared with its previous forecast of about 20%, as it sees higher orders coming in given the accelerated digitalisation trend.
Kenanga Research said given the aforementioned reason, Frontken experienced a record quarter in the second quarter ended June 30, 2020 (2QFY20) with net income standing at RM20.3 million (+19% quarter-on-quarter or q-o-q).
The research house said this brought Frontken’s net income for the cumulative six months ended June 30, 2020 (6MFY20) to RM37.3 million (+17% year-on-year or y-o-y).
“Chart-wise, the stock rebounded from its 50-day SMA (simple moving average) in mid-September and continued to find support at its 20-day SMA.
“Given that the shorter-term key SMA continued to trend above the longer-term key SMA, we thus believe the uptrend shall persist.
“With that, our overhead resistance levels are positioned at RM4.10 (R1; +11% upside potential) and RM4.40 (R2; +20% upside potential).
“Meanwhile, our stop loss is pegged at RM3.30 (10% downside risk),” it said.