RGB International Bhd

(RGB, 0037)

RGB International (Trading Buy, TP:RM0.225, SL: RM0.155)

• From a technical perspective, RGB International (RGB)’s share price (which closed at RM0.175 yesterday) is on the
verge of breaking away from a negative sloping trendline after languishing inside a tight price range since early Sep
2019.
• Interestingly, there is renewed interest from investors in accumulating RGB shares. Trading activity in the stock is
on the rise with daily average trading volume increasing from 2.2m shares last week to 3.2m shares so far this week.
• A breakout on the upside could lift the share price to our resistance targets of RM0.225 (R1) and RM0.255 (R2).
This represents potential returns of 28.6% and 45.7%, respectively.
• In terms of downside risk, we have set the support levels at RM0.155 (S1) and RM0.135 (S2), which are 11.4% and
22.9% below its last traded price, respectively.
• Fundamentally, RGB has shown better sequential quarterly earnings, with net profit rising from RM6.7m in 1Q19 to
RM7.2m in 2Q19 to RM11.2m in 3Q19. Assuming 4Q19 result (due to be out next month) is similar to 3Q19,
estimated full-year earnings of RM36.3m would translate to an undemanding FY19 P/E of 7.4x.
• RGB – a leading supplier of electronic gaming machines and casino equipment as well as a key machine concession
primarily in Malaysia, Singapore and IndoChina – is in a position to ride on the growing gaming industry in the region.
It is also currently in a strong financial position with a net cash position of RM32.1m or 2.1 sen per share as of end
Sep 2019.
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Published:

RAKUTEN TRADE SDN BHD (266701-P) Kenny Yee Shen Pin

Level 7, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia Head of Research