Morning Call | 26 February 2014

FLOWS

Wednesday, 26 February, 2014

BUY

TM, IOIP, CIMB

SELL

PERISAI, SKPETRO, TENAGA

STOCK ALERT

STOCK NAME

DATE

PRICE

BUY/SELL

TARGET PRICE

DRBHICOM (1619)

26/2/2014

RM2.68

ACCUMULATE on weakness

RM2.95

Stock has retraced 4% from its recent high and has an initial support at RM2.63 which coincides with its SMA200 at RM2.64. The fundamentals are improving with its main division, the Proton-led auto division gaining market share with their new models, Suprima S & Saga SV, due to their competitive pricing vis-à-vis Perodua cars, from parts standardisation & streamlining of supply chain cost savings. This is part of the Proton’s 5-year business plan which targets to sell 500,000 cars per annum, including 150,000 units for exports, by 2017/18. Proton also plans to produce a global small car by next year which would help them to further gain back the market share lost to Perodua. Recently, it was reported that Proton will deliver 3,000 units of the new Perdana replacement model to replace the government’s existing fleet. DRB said that they have also received requests from state governments and statutory bodies to make the switch as well. There were recent news flow of impending introduction of mandatory inspection of passenger vehicles. DRB’s subsidiary, Puspakom, which has the sole concession to undertake computerised inspections for all commercial vehicles until 31/8/2024 will likely be the main beneficiary from this move. The recent removal of big cap institutional stocks like Bumi Armada, AirAsia, YTL Power, SPSetia, Tan Chong & MRCB from the Syariah-compliant list will coerce Syariah-compliant funds to look for alternative stocks to reallocate their funds and DRB will likely be one of the four bigger cap additions that they can switch into. Accumulate on weakness (PT/LJN)

IRCB (2127)

26/2/2014

RM0.375

Trading BUY

RM0.55

After hitting a 3-year high of RM0.55 in Sept’13 following the announcement of a debt settlement scheme with its bankers & non-financial creditors coupled with debts forgiven of RM25.7m, and the proposed capitalisation of RM44.8m advancement from its managing director, Cheang Phoy Kean, (substantial shareholder & appointed as the MD of the company in Jan’13) & Keen Setup Sdn Bhd via the issuance of 224m new ordinary shares of RM0.20 each in IRCB with 112m new warrants attached. Since then, IRCB has been consolidating in a symmetrical triangle pattern with the chart now approaching the apex of the triangle signifying a potential break-out soon. The catalyst for this may come in the form of the release from its current PN 17 status as the company has submitted a proposed regularisation plan to Bursa Malaysia in Dec’13 and is awaiting Bursa’s approval. In addition, for its latest 3Q’FY14 results, the company has reported a significant turnaround with an operating profit of RM2.76m versus last year corresponding quarter’s loss of RM9.95m and  2Q’FY14 operating loss of RM7.41m. Trading buy (PT/LJN)

Calls for  FEB Week 2/Week 32014

STOCK

Initiation Dates

Initiation price

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

MPHBCAP (5237)

19/2/2014

RM1.78

ACCUMULATE

RM2.00

RM1.88

+5.7%

WASEONG (5142)

19/2/2014

RM1.99

ACCUMULATE

RM2.50

RM1.99

0.0%

UMWOG (5243)

20/2/2014

RM4.39

BUY

RM4.80

RM4.29

-2.3%

MUHIBAH (5703)

20/2/2014

RM2.64

SELL

RM2.30

RM2.57

-2.7%

SEALINK (5145)

21/2/2014

RM0.445

BUY

RM0.55

RM0.45

+1.1%

PENERGY (5133)

21/2/2014

RM2.34

ACCUMULATE

RM2.70

RM2.35

+0.4%

KIMLUN (5171)

24/2/2014

RM1.59

ACCUMULATE

RM1.96

RM1.61

+1.2%

TSH (9059)

24/2/2014

RM3.00

ACCUMULATE

RM3.60

RM3.00

0.0%

GTRONIC (7022)

25/2/2014

RM3.28

ACCUMULATE

RM4.00

RM3.26

-0.7%

TDM (2054)

25/2/2014

RM0.94

ACCUMULATE

RM1.50

RM0.935

-0.6%

 

HOLD
CONT SELL	SELL/ TAKE PROFIT
CONT BUY	STRONG BUY