MORNING CALL: 25/9/23

Apex Research favours Kronologi Asia for its gaining traction in sustainable income, promising industry outlook and robust balance sheet.

Transcript

00:00 Good morning, today it's Chronology Asia, which provides Enterprise Data Management

00:06 or EDM solutions.

00:07 Apex Research maintaining its buy recommendation on the counter with a target price of 53 cent.

00:14 The stock last closed at 42 cent.

00:16 According to Apex, Chronology's second quarter FY20 for results met expectations, though

00:22 first half earnings accounted for only 24% of its full year forecast.

00:27 This is consistent with the seasonally slow performance during the first six months of

00:32 the year.

00:33 But the research house expects the earnings will pick up in the remaining quarters, particularly

00:38 in the second half of FY24.

00:40 Looking ahead, it is optimistic on the company's China operation in the near term due to its

00:45 recovery prospects and in the long term, supported by growth in the EDM as a service business

00:52 and the ongoing supply chain relocation.

00:54 Meanwhile, Chronology's focus on serving Asian markets will mitigate risks amid global economic

01:00 headwinds.

01:01 Apex keeping its FY24 net earnings forecast at RM23 million and FY25 net earnings forecast

01:09 at RM27.8 million.

01:11 The research house favours the stock for its gaining traction in sustainable income, promising

01:16 industry outlook and robust balance sheet.

01:20 So what's the consensus?

01:21 According to Bloomberg data, only Apex covers the stock.

01:25 To recap, that's one buy with a target price of 53 cent.

01:29 Chronology closed on Friday at 42 cent, so that's a potential return of about 26%.

01:35 (upbeat music)

01:37 [MUSIC PLAYING]