MSM Malaysia Holdings Bhd (MSM, 5202)

• MSM is poised for a bullish breakout from its two-week rectangular pattern, targeting to surpassthe immediate resistance at RM1.86. With the stock pulling further away from all the EMAs couple with a strengthening RSI, thus signalling a continuation of the ongoing uptrend.

• In the event it breaks above the RM1.86 neckline, this will improve market sentiment and should liftthe stock towards the subsequent level of RM1.92 (R1), followed by RM2.00 (R2).

• On the downside, stop-loss is set at RM1.61, below 27 Dec’s low.

• Fundamentally, MSM is poised to benefit from the RM1,000/MT incentive for Nov and Dec 2023 on24,000MT/month of CGS (coarse grain sugar) 1kg/2kg and FGS (fine grain sugar) 1kg. The strategic boost in UF (utilisation factor) at MSM Johor, increased sales in the bulk 50kg segment, and an emphasis on export production showcase MSM's growth commitment. Furthermore, advocating for a revision in the 1kg sugar ceiling price may certainly enhance MSM's financial prospects.

Source: Rakuten Research - 18 Jan 2024

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