KUALA LUMPUR (July 7): Kenanga Research said the sell-down in Aurelius Technologies Bhd’s share price — which closed at its IPO offer price of RM1.36 on Wednesday (July 6) — may be coming to an end soon amid the declining transacted volumes in recent days.

In a daily technical highlights on Thursday, the research house said that with the stochastic indicator showing the %K line crossing above the %D line, and as the five-day EMA approaches the 15-day EMA, the share price will likely show an upward bias ahead.

“A technical breakout from the negative sloping trend line could then lift the stock towards our resistance thresholds of RM1.55 (R1) and RM1.65 (R2), which represent upside potentials of 14% and 21% respectively.

“Our stop loss level is pegged at RM1.20 (a 12% downside risk).

“An electronics manufacturing services (EMS) provider focusing on industrial electronic products and semiconductor components, Aurelius — which was listed in mid-December last year — posted net profit of RM5 million (-2% q-o-q) in 1QFY23 as its productivity was affected by supply chain disruptions,” it said.

The research house said that going forward, on the back of strong backlog orders and capacity expansion in 2HCY22, the consensus is predicting that Aurelius would report a net profit of RM33.3 million in the financial year ending Jan 31, 2023 (FY23) and RM47.3 million in FY24, which translate into forward PERs of 14.6x and 10.3x respectively.