MORNING CALL 15
AUGUST 2012
FLOWS;
BUYS: Gamuda, CIMB, AMMB
SELLS: AirAsia, MHB, PCHEM
TECHNICAL CALLS
Huayang (RM2.06) :
Share price fell 5% yesterday, following the listing of it's placement shares (
14.4m share priced at RM1.82). Co is still the best proxy for affordable
housing play, and the solid earnings growth (cir 30% for FY13-14) should
support the stock's valuation.
Huayang is expected to generate about RM550m sales in
FY12, has unbilled sales of RM505m ( as at Dec 2012) and RM810m worth of new
property launches in FY13, will continue to underpin growth over the next 2-3
years. Co has also proposed a bonus issue ( 1 for 4 held ) & together with
the private placement, will enlarge share cap by 37% to 198m shares from 144m
shares. Trading at just 4.6x FY13 PE & 0.93x P/Bk, we are positive on
recent proposals, proceeds of which will enable the group to finance future
land acquisitions & improved trading liquidity. BOW.
(AK)
STOCK OF THE DAY
Puncak(RM1.30) - the stock dropped from a high of 4.88 in
Oct'2007 to a low of 0.95 in Dec'2011; it then rebounded to 1.89 before
consolidating in a triangle formation for the last 6 months. Despite the
overhanging negative news on the water sector consolidation tussle with the
Selangor govt, the stock exhibits steady accumulation around the 1.30 levels.
For the more aggressive funds, we would advocate a trading buy on Puncak as we
are of the opinion that the buyers of this stock are aware of its intrinsic
value. Puncak has a SOP value of 3.64,
with 3/4 of the value coming from the
secured water treatment business under Puncak Niaga Sdn Bhd. The more
controversial business of water distribution under Syabas contributes to 25% of
the SOP. Hence, even if PR wins the Selangor state election, investors are
assured of at least 2.73 ie the value of the water treatment business. However
if BN wins, Puncak should benefit even more with a potential part to play in
the Selangor state water sector consolidation exercise or a higher value being
placed for its assets in the event of any takeover. Puncak is also a play in
marginal oilfields through its subsidiary, Puncak Oil & Gas, which is
involved in offshore pipe laying and also owns vessel for this business.
(PT)
