QL Resources Bhd (+ve)

AGRO-food corporation QL Resources Bhd (fundamental: 0.8/3, valuation 0.5/3), whose shares hit a record high yesterday, has made it into our Stocks with Momentum list for the second time this year. The stock rose 13 sen or 1.88% to close at its highest ever of RM7.05, after 6.55 million shares were done, higher than its 200-day average volume of 1.19 million shares. Year to date, the stock has gained 62.07%.

In August, the group’s founder and executive chairman Chia Song Kun said he remained positive about FamilyMart’s long-term prospects and expected the business to contribute positively to QL in a year or two.

In an Oct 17 note, Affin Hwang Capital wrote that FamilyMart remained an attractive platform for vertical integration and growth for QL in the long term.

The research also upgraded QL to “buy”, with a target price of RM8 versus RM5.90 previously, as it tweaked its forecasts from financial year 2020 to reflect much stronger growth in store count and average ticket size for FamilyMart ops, supported by steady regional expansion in QL’s other segments.