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Demand for corrugated packaging has been on the rise for packaging of essential products such as groceries, food & beverage, healthcare products and e-commerce transportation. We like Muda Holdings as one of the largest integrated paper mill and corrugated packaging manufacturers in Malaysia.
At RM1.53, Muda Holdings trades at PE of 11.4x which is below its historical one standard deviation average of 15.7x; implying potential upside in our view.
Technically, share price has staged a gradual recovery, bottoming out since mid March 2020. After the recent two-day pullback, price has formed a hammer candle to rebound off the daily EMA20 level. For now, we monitor for a potential flag formation breakout above RM1.53 for price to attempting to re-test the RM1.64- RM1.70 targets with long term target at RM1.82.