KARYON INDUSTRIES BHD (listed on Bursa Malaysia) is principally involved in investment holding, manufacturing and trading of PVC, chemical, industrial products, foam booster, washing detergent and shampoo. It is currently traded at RM0.17 per share (as of 19 June 2018).

Why would I consider taking a quick & risky punt at this penny stock? 

Karyon Is The Proxy Of Shorting Against Brent Crude

Being in the downstream of the Oil & Gas segment (i.e oleo chemical / PVC), Karyon is a good proxy to short against the Brent, as shown below:

Brent vs Karyon.png

In a rising interest rate environment, one may expect the USD to continue its upward trajectory. A rising USD may be bearish on commodities, e.g brent crude. One possible trade idea is to consider Karyon as a proxy to short against the brent.

DXY.png

A possible technical rebound?

With brent crude currently in a range bound position, we are seeing Karyon’s share price to be in similar range bound. Strong support appears at RM0.145, with possible resistance zone at RM0.19-0.21. If Karyon is able to hold above RM0.165 per share, there may be likelihood that Karyon will be able to break its resistance zones.

Karyon_19062018_TA.png

Relatively clean balance sheet, trading below net asset

It is currently in a net cash position.

Karyon_BS.png

Trading below intrinsic value?

For illustrative purpose only, our simple high-level desktop calculation appears to show a probable intrinsic value of RM0.20 per share (coincidentally, same as its current net asset per share):

Desktop Value.png

Some ‘recent’ support from major shareholders / management

Karyon_InsiderTrades.png

Management prospects: expected to remain satisfactory

Karyon_Prospects.png

 

 

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