Hextar Global Bhd

(HEXTAR, 5151)

Hextar Global Bhd (Trading Buy, TP: RM0.84, SL: RM0.60)

• Hextar Global offers promising fundamental prospects as the Group is set to ride on its exposure in the
food/plantation industry (via its agrochemicals business) and healthcare sector (as a manufacturer and
distributor of healthcare disposable products, such as wet wipes, cotton-based products, sanitary towels and
tissue products).
• Net profit for 1Q20 surged to RM9.5m (+56% YoY and +22% QoQ) as revenue jumped to RM104.6m (+28% YoY and
+26% QoQ).
• This comes after the Group has completed a related party acquisition of a 100% stake in Hextar Chemicals Limited
(HCL) for RM596.8m (via the issuance of new Hextar Global shares at 81 sen per share and RM17.9m in cash) in
April 2019.
• Meanwhile, the Company has been buying back its own shares from 17 Mar to 30 Apr this year, up to 6.7m shares
at an average price of 53 sen apiece.
• Technically speaking, Hextar Global shares are looking interesting. After breaking out from a negative sloping
trendline that stretches back to a high of RM1.05 in mid-Mar 2019, a trend reversal pattern could be in the works.
• We reckon the stock – which is currently in a consolidation mode after hitting a recent high of RM0.75 – is poised
to resume its positive momentum to reach our immediate resistance target of RM0.84 (R1). A convincing breakout
will then push the share price to our next resistance barrier of RM0.90 (R2).
• This represents potential upsides of 20% and 29%, respectively from yesterday’s closing price of RM0.70.
• On the downside, we have placed our support levels at RM0.60 (S1) and RM0.55 (S2), translating to downside risks
of 14% and 21%, respectively.
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Published:

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