Daily Star: FAJAR (7047.KL)

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This stock idea was founded from Stocks that consolidate after moving uptrend.

Company Background:
1. Mainly involved in construction activities in Malaysia and also involves in manufacturing ready-mix concrete, trading construction materials and property development
2. A vertically-integrated construction set-up, which has the ability to provide a one stop service for its clients to save cost while maintaining quality service. It possesses the expertise for ground works/ piling works, infrastructure works, substructure/ super-structure works and finishing works, with in-house design and build capabilities.
3. Construction segment: Fajarbaru is bidding for some RM4bil worth of rail projects. (Fajarbaru is looking to position itself as a serious rail player)
4. Property segment: Recently completed its maiden project in Melbourne, Australia, called Gardenhill. Paragon, which is also a project between Fajarbaru and its Australian partner Beulah International, is expected completion is in 2020
5. Fajarbaru Builder Group’s net profit in the third quarter ended March 31, 2017 (3QFY17) grew close to eight times to RM22.2 million, from RM2.86 million a year earlier, on revenue generated by its property development segment.

Recent News:
1. Fajarbaru wins cargo terminal upgrade job from Pos Aviation

Major Shareholder Movement:
Fajarbaru Builder Group Bhd’s single largest shareholder, Datin Lai Mooi Far, disposed of three million shares on the open market on May 9. On that day, Fajarbaru had been trading at between 87.5 sen and 91.5 sen.

A May 15 filing shows that Lai sold another 3.9 million shares on the open market on May 12, reducing her stake to 8.15%. The disposal was done near Fajarbaru’s one-year high price range. The construction group, which has been on investors’ radar screen since early February, saw its share price rise 63.7% to 92.5 sen last Thursday.

Fundamental Strength:
1. P/E: 12.71
2. Latest Quarter Announcement: 30 May 2017
3. Q3 EPS grew 675% compared to same quarter last year
4. Q3 EPS grew 917% compared to Q2 in same annual year.
5. Q3 revenue doubled as compared to same quarter last year, which is mainly driven by the recognition of the revenue generated from the completion of property development in Melbourne (Gardenhill).

Technical Indicators:
1. Stochastic at oversold region
2. RSI trading at 60.15
3. MACD: no bullish crossover (MACD line below Signal Line)
4. MACD travels above 0 line and begins to flatten
5. SMA 10, 30, 60-day moving upward (Uptrend remain intact)

Price Movement:
1. Major uptrend started in February 2017. The stock prices moves upward from around 0.555 in February 2017 to 0.92 today, which accounted for about 65% rise in stock price for around 4 months.
2. One major successive waves is formed while the second successive wave is still being formed. (First High: 0.785, Second High: 0.935, First Low: 0.715, Second Low: Awaiting)

Conclusion:
1. Uptrend is believed to remain intact with strong earning announcement. Short term profit taking is expected.
2. Buying signal: After second low is formed in the second successive wave

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