Positive downtrend may drive Tiong Nam prices higher

PETALING JAYA — Hong Leong Investment Bank (HLIB) said it maintained a “buy” rating on Tiong Nam Logistics Holdings Berhad (Tiong Nam) with a sum-of-parts target price of RM2.07, or 29.4% upside.

“We like Tiong Nam owing to its logistics and warehousing division that will continue to anchor the group’s growth in the coming years with e-Commerce and resilient increase in the business-to-business trade volume.

“The expectation of real estate investment trust listing of warehouse assets (likely to defer to the second half of this year) together with potential special dividend post-initial public offering will bring about an asset rerating,” said HLIB.

HLIB opined that while the outlook of the property market is still subdued, the group still owns undeveloped landbank with the size of 152.7 acres, with an estimated gross development value RM1.5 billion, which is an upside catalyst that has not been taken into account for potential new launches.

Moreover, the focus of Tiong Nam is on industrial property development which is more resilient amid current subdued property market.

“Upside bias towards RM1.76-1.80 zones following a bullish downtrend line breakout. Tiong Nam is ripe for further rebound following the formation of Tweezers bottoms and positive downtrend resistance breakout last Friday, supported by bottoming up indicators,” HLIB wrote.

A decisive breakout above RM1.65 (50% FR) will spur prices higher towards RM1.76 (52-week high) before reaching our LT objective at RM1.86 (138.2% FR).

“Key supports are situated near RM1.54 (Tweezers bottom) and RM1.51 (200-d SMA). Cut loss at RM1.49,” said HLIB.

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