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FLOWS
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Monday, 4 November, 2013
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BUY
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MAYBANK, COASTAL, CIMB
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SELL
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GENTING, DIALOG, TM
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STOCK ALERT
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STOCK NAME
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DATE
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PRICE
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BUY/SELL
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TARGET PRICE
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ARMADA (5210)
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4/11/2013
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RM3.97
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ACCUMULATE
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RM4.50
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The stock has been consolidating in a trading band of RM3.60
to RM 4.18 since May’12 after it hit a high of RM4.53 in April’12. In the
immediate term, it is tracing out a bullish ascending triangle pattern with a
break-out target of RM4.31. Potential catalysts are awards of FPSO contracts.
Recently the Upstream reported that Armada has the edge in 2 huge FPSO
contracts to be announced over the next month, i.e. USD1b Kracken North Sea
& Indonesian Madura gas condensate development (estimated worth up to
USD1.8b). These FPSO contracts are substantial as they are easily more than
twice the size of Armada’s existing individual FPSO projects. It is
also reported that the company is also one of the two shortlisted bidders for
Afren’s Okoro FPSO job off Nigeria. Armada has also positioned itself for
jobs in the lucrative subsea market & ventures in marginal fields
development with its 59:49 JV with Dutch firm, Fugro, which has expertise in
marine subsea operations, well intervention & drilling operations.
Fundamentally, the current valuation of Armada is relatively attractive at
FY14 PER of 18.9x versus its historical PER of 27x. Accumulate on weakness.
(PT)
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HARTA (5168)
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4/11/2013
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RM7.23
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TAKE PROFIT
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RM6.50
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Group is expensive at current level with FY14 PER of 20.3x
& p/bk of 6.6x compared to 5-year average PER & p/bk of 12.7x &
4.2x respectively. With earnings growth slowing as competition heats up
(average selling price dropped below RM100/1k pieces in 1QFY14 for the first
time), an increasing cost environment (e.g. energy & labour costs) &
slower capacity expansion, the premium valuation assigned on Harta is no
longer justified. The weakening of the USD versus the MYR by 5.5% since
the end of August does not bode well for its earning too. In addition, the
charts are also indicating a potential pullback is imminent with negative
divergences seen between the technical indicators (e.g. RSI & MACD) and
its price. The mid-term trend indicators are also bearish with negative
crossovers seen on the weekly technical indicators. The listing of Karex on Wednesday
may potentially be a negative for Harta if it encourages investors to switch
from other players in the rubber products manufacturing sector to Karex. Take
profit.
(PT)
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Calls for OCT Week 3/ Week 4
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STOCK
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Initiation Dates
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Initiation price
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BUY/SELL
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TARGET PRICE
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LAST PRICE
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% Change
since Initiated
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KEURO(3565)
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28/10/2013
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RM1.26
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ACCUMULATE
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RM1.58
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RM1.23
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-2.3%
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CARLSBG(2836)
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28/10/2013
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RM12.46
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Trading BUY
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RM15.00
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RM12.64
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+1.4%
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MAGNUM (3859)
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29/10/2013
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RM3.31
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Trading BUY
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RM3.60
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RM3.28
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-0.9%
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KPJ (5878)
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29/10/2013
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RM6.15
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ACCUMULATE
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RM6.80
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RM6.10
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-0.9%
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IJM (3336)
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30/10/2013
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RM5.84
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ACCUMULATE
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RM6.70
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RM5.80
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-0.6%
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UOADEV (5200)
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30/10/2013
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RM2.22
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BUY
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RM2.68
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RM2.19
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-1.4%
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GTRONIC (7022)
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31/10/2013
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RM3.00
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ACCUMULATE
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RM3.50
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RM3.02
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+0.9%
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HUAYANG (5062)
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31/10/2013
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RM2.11
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BUY
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RM2.62
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RM2.14
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+1.4%
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AIRASIA (5099)
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1/11/2013
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RM2.68
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ACCUMULATE
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RM3.50
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RM2.66
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+0.8%
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COASTAL (5071)
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1/11/2013
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RM3.51
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TAKE PROFIT
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-
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RM3.40
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-3.2%
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HOLD
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CONT SELL
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SELL/ TAKE PROFIT
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CONT BUY
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STRONG BUY
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