KUALA LUMPUR (Dec 3): Kenanga Research said Wong Engineering Corporation Bhd’s (Wong) uptrend remains intact as the share price is still hovering above: (a) the 50% Fibonacci retracement level (as measured from its mid-July’s trough to the mid-October’s peak) following the pullback; and (b) the 100-day SMA line.

In a daily technical highlights note today, the research house said when the buying interest resumes, the stock is expected to continue its upward journey by climbing towards our resistance levels of 81 sen (R1; 10% upside potential) and RM0.91 (R2; 24% upside potential).

Kenanga said it has set its stop loss price at 67 sen (or 9% downside risk).

“On the fundamental front, Wong – which is principally engaged in the manufacturing and sales of high precision stamped and turned metal parts & components – offers exposure to the E&E (electrical & electronics) industry.

“The Group saw an earnings recovery to RM2.2 million in 3QFY20 (versus net profit of RM1.1m in 3QFY19 and net loss of RM0.1 million in 2QFY20), taking its bottomline to RM2.8 million (+45% y-o-y) for the 9-month period ended July 2020.

“As of end-July this year, the Group’s net cash holdings stood at RM9.3 million (or 8.4 sen per share),” it said.
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