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FLOWS
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Thursday, 13 March, 2014
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BUY
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TENAGA,
CIMB, ASTRO
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SELL
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TM, AXIATA, MISC
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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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CYPARK (5184)
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13/3/2014
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RM2.42
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BUY
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RM2.80
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Recent trading
saw Cypark’s relative strength with the stock rallying against the dull broad
market and its macd triggering a buy signal with a golden cross on
increasing volume. It is a growth stock in the right sector (Renewable Energy
(RE)) back by solid fundamentals - trading at attractive PERs of 8.6x &
6.7x for FY14 & FY15, yet has eps growth rates of more than 30% for
the next 2 FYs due to its renewable energy division which has increased its
export capacity to Tenaga by more than 3x in FY13 and is expected to increase
its capacity further in FY14. The Malaysian Government Green Energy Policy
plans to increase generation capacity from RE sources to 5-6% of total
generation capacity by 2015 from 2% currently. In fact, the Sustainable
Energy Development Authority (SEDA) is expected to announce the new RE quota
capacity by the end of this month as the SEDA’s fund size will increase to
more than RM600m p.a. from the current RM300m p.a. after the recent increased
contribution to the fund of 1.3% from 1.0% of the total electricity bill for
users that use above 300kwhof electricity. Cypark has comparable advantage to
secure additional RE quota because of its track record and first-mover
advantage, and has proceeded to build another 10MWof solar capacity in
anticipation of the new quota. Buy
(PT)
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SUPERMX (7106)
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13/3/2014
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RM2.80
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BUY
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RM3.10
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With liquidity
withdrawn from the global monetary system due to the Fed tapering, emerging
market currencies are likely to depreciate against the USD & commodity
prices will be under pressure with rubber prices exacerbated by slowing China
growth. Volatility of asset prices will also increase in such scenario. All
these are positives for the rubber glove sector with Supermax particularly
attractive now that it has retraced to buy levels from the sell-off after its
4Q13 results came in below market expectations because of the loss of
production from a fire in its Malacca plant and the disruption to production
lines of an ongoing automation programme. But since mid-January, 50% of the
Malacca plant production has been restored and the remaining lines are
targeted to be running by end-March. The automation programme are engendering
higher operating efficiency and the results are already been seen in the 4Q13
profit margins. 2 new plants with 5.4b pieces of nitrile gloves are on track
to be commissioned in 1Q14, and these will increase the higher-margin nitrile
glove capacity by 78% and the total installed capacity by 30%. The next 2
years are expected to see mid-teens growth underpin by these capacity
expansion. Supermax is also attractive compared to its peers like Hartalega,
Kossan & Top Glove which trade at an average FY14 PER & p/bk of 17.3x
& 3.86x versus Supermax’s FY14 PER & p/bk of 12.4x & 1.9x. EPF
has re-emerged has a substantial shareholder 2 days ago and this will further
add credibility to the stock. Accumulate
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Calls for MARCH Week 1 / Week 2 2014
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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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HUAYANG (5062)
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5/3/2014
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RM1.86
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ACCUMULATE
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RM2.38
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RM1.86
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+0.0%
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SURIA (6521)
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5/3/2014
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RM2.43
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ACCUMULATE
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RM3.00
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RM2.59
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+6.5%
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BRAHIMS (9474)
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6/3/2014
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RM2.44
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BUY
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RM3.04
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RM2.61
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+6.9%
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PANTECH (5125)
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6/3/2014
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RM0.91
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ACCUMULATE
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RM1.10
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RM0.905
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-1.1%
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GAMUDA (5398)
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7/3/2014
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RM4.62
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BUY
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RM5.20
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RM4.48
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-3.1%
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MEDIAC (5090)
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7/3/2014
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RM0.91
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ACCUMULATE
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RM1.05
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RM0.90
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-1.1%
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UCHITEC (7100)
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10/3/2014
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RM1.36
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ACCUMULATE
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RM1.58
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RM1.34
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-1.5%
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VITROX (0097)
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10/3/2014
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RM1.44
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BUY
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RM1.70
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RM1.50
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+4.1%
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PHARMA (7081)
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11/3/2014
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RM4.18
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BUY
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RM5.40
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RM4.20
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+0.4%
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BSTEAD (2771)
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11/3/2014
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RM5.46
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ACCUMULATE
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RM6.00
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RM5.48
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+0.3%
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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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