KUALA LUMPUR (March 12): Hong Leong Investment Bank (HLIB) said Tomei Consolidated Bhd is strategically positioned for robust sales during the upcoming Hari Raya period, historically driving sales for the company’s 916 gold products.
In a technical tracker on Tuesday, the research house said that coupled with margin expansion, the jeweller is anticipated to yield strong results for the second quarter ending June 30, 2024 (2QFY2024).
“Tomei is currently trading at a trailing 4.3 times price-earnings, significantly lower by 57% compared to its 10-year average of 10 times.
“The combination of undemanding valuation, the excitement surrounding earnings during the festive season, and buoyant gold prices should lead to a rerating,” HLIB said.
The research house said global gold prices experienced a significant rally in March, fuelled by anticipation of an imminent interest rate cut by the US Federal Reserve, reaching a record high of US$2,195 per oz before mildly retracing to US$2,182 per oz on Monday.
“This surge has not only sparked interest in gold-related counters like Tomei, but also propelled their share prices upward.
“Monday’s strong breakout above its previous high of RM1.40, coupled with an expanded volume, is poised to propel the share price towards the RM1.52-RM1.59-RM1.67 region. Cut loss at RM1.28,” the research house said.