Mewah

Mewah: No Particular Specific Co. news heard yet abt Mewah, although we do note that SIAS Research issued a technical sell call on counter 3 days ago. Note that movement of the stock is unpleasant and has fallen almost 14% since hitting a peak of 1.23 on 18 January 2011 (based on previous closing price of 1.06)…..

Price and volume have started trailing off after forming a major downside reversal pattern (Double Top) between 5 Jan11 and 24 Jan11. This suggests that demand is dwindling, and the stock may well go substantially lower in the coming weeks. Upside momentum is also weakening as (MACD) continues to head lower….

The downtrend line of the trend channel offers strong resistance for the stock as it deters the share price from moving higher. Note that a break below the critical support level of $1.00 will indicate a minimum downside target of $0.90. Recommend taking profit off the stock as house expect further downside to $0.90.

Fundamentally, Mewah is currently being covered only by CIMB, NOMURA and BNP Paribas, and all have a Buy Call on stock with a Mean TP of $1.34. As for its exposure to MENA, Mewah sells its products to more than 100 countries and is a household name in some of those nations. Moi and Oki are popular brand names in the Middle East, Africa and India….

Note also that Egypt generally imports 800,000-900,000 tons of palm oil a yr from Malaysia, according to data from the Malaysian Palm Oil Council, and Middle East buyers, are currently now negotiating on a contract for April shipment of 20,000-40,000 tons. Note that Mewah is a Processor of Palm Oil (Middle Stream), and does traditionally does not engage in the cultivation of Palm Trees….

At current price, Mewah trades at 10.9x FY11E P/E vs peers simple average of 17.7x.