hSenid Business Solutions PLC / HBS.N0000 / CSEStrategy
1. Portfolio alignment to the sectors that will benefit from the rapid economic recovery of Sri Lanka.
2. Benefit from the expected price recovery/breaking out from the 1-year consolidation range (bottoming out) after post IPO selloff.
Most of the selling came from the account: Mr. O.E.H. Kalvo which had 19,800,000 shares as at 31st Dec. 2021 and are expected to be over by now.
Fundamentals
* Continuous top line growth during last 4 quarters
* As Sri Lanka's economy is on a growth phase exceeding forecasts HBS will benefit from
increased IT budget allocations of other companies and new ventures.
* Business exposure to high growth areas of the world (South Asia, Southeast Asia, Middle East and East Africa)
* Most of the major shareholders opted the dividend in the script form (reinvesting the dividend in the company) instead cash which shows the strong confidence of the company's growth trajectory.
No of shareholders requested for 100% script dividend: 12%
No of shareholders requested for 50% cash & 50% script dividend: 45%
Q1 2024 earnings
Revenue up 30.5% YoY & 7.6% QoQ
New deal closures up 44% YoY
Dividend Yield
Last Dividend LKR 1.25 (Cash/Scrip or both 50/50)
DY : 10.4% (Market DY 4.4% / 1 Year FD rate 8%)
IPO
Opened: 3rd Dec 2021
IPO Price : LKR 12.50
CSE debut Price LKR 28.50
52 Week Price Range
High : LKR 14.00
Low : LKR 10.50
Technical Analysis (Chart Patterns)
* HBS had created a Descending Wedge pattern during the post IPO selloff and a Reverse Head & Shoulder pattern during the 1 yearlong price consolidation (Dividend adjusted chart).
* Both these patterns recorded breakouts during last week.
Potential Pattern Targets
* Multi week descending wedge target LKR 20.00
* Reverse head & shoulder target LKR 14.30
SRI
ASI Bearish again! Where is the bottom?Next Strong Support Levels:
8600
8200
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SRI ($SRI) cup with handleIt looks like SRI is forming a cup with handle that started in April, with a resistance at the lower $32 level. The stock price showed a small decrease during the last few weeks (handle), the volume dried up due to the lack of interest from the holders to sell it and the price at the close didn't show significant fluctuations. A volume increase during the next few weeks could indicate that the stock price will advance in its bullish trend that started in 2016. Based on the last peak, in Aug 2018, the stock price could be adjusted up 10% to %20% depending on the results presented on the earnings release (Jul 31) and on the trading volume.