MORNING CALL 26 JULY
2012
FLOWS;
BUYS: CIMB, Digi, BAB
SELLS: Gamuda, Mudajaya, PChem
Technical Stock Alert;
Wing Tai (RM1.80) -
The comeback kid in garments which will benefit from the current premium
placed on consumer stocks. Wing Tai have recently introduced Uniqlo to the
country is still in talks of introducing another one or 2 brands this year and
next. Other international fashion brands under Wing Tai are Topshop, Topman,
Dorothy Perkins, Miss Selfridge, Warehouse, Karen Millen, Diva, pumpkin Patch
as well as Uniqlo. Most of these brands cater to mid to higher income target
market group which separates them from their closest rival Padini. Co's retail
division grew 23% after opening another 6-7 stores nationwide including several
topshops and uniqlos in high growth areas such as MV, Pavilion etc. Retail and
Garment Manufacturing contributes to 42% of revenue last year. YOY- wingtai
posted earnings rose 31.5% to RM24.28mil in the third quarter ended March 31,
2012 from RM18.46mil a year ago. Sales of Wingtai retail division grew at
annual rate of 19% compared with Padini of
just 14%. During the Same financial period (FY11) Wingtai's net profit rose to 100mil of 369mil
revenue for FY11 and Padini with just 75.5mil net profit out of 500mil revenue
which translates to 13% margin. Div yield: 5%. Stock prices have fallen from a
high of RM2.00 and have reached to a lower end of the Bollinger band at RM1.80
recently, believe that this is the support level and it's safe to buy. BOW
(RL)
MUDAJAYA (RM2.51) - concerns continue to linger over its
fuel supply agreement for its 26% owned RKM Powergen IPP. The latest delay
could see some conclusion by the end of the month and possibly lift its share
price off its current lows which is marginally higher than its 6mth low of
RM2.44. RSI is back down to its low end of 32 with MACD neutral to positive
bias. BUY for a favourable announcement on the latest deadline for its FSA.
Immediate target RM2.78. BUY
