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FLOWS
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Friday, 2 May, 2014
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BUY
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AXIATA,
GAMUDA, IOICORP
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SELL
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MAYBANK, DIGI, SIME
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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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HARTA (5168)
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2/5/2014
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RM6.34
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ACCUMULATE
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RM7.40
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The
share price has drifted c18% lower over the past 6 months, partly on the back
of concerns over the natural gas tariff revision that will start on May 2014,
the lack of short term catalysts & more recently the caution on potential
continuation of water rationing in Selangor and the threat it poses to
production. We reckon the sell-down has been overdone. The market should not
be overly concerned of the 20% natural gas price hike as the group is able to
pass on the cost increase to their customers ( with just a 1.5 months lag)
& the water issue is still manageable and steps can be implemented to
improve the efficiency of water usage internally. Valuations are now
attractive, at 17x for FY03/15. In recent meetings with management, we
understand that the Next Generation Integrated Glove Manufacturing Complex
(NGC) is on track to commence commercial production from Oct 14 onwards &
that new glove capacity expansion plans for FY15 & 16 are as planned.
Group is still recording solid demand for nitrile gloves over the last 2
months, contrary to market expectations. RSI at 34 ; Accumulate, TP RM7.40 (
based on 20x FY03/15 EPS ).
(AK)
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UMW (4588)
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2/5/2014
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RM10.76
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ACCUMULATE
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RM12.00
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The
stock price is down 13% YTD, decline driven by investors’ concern over
overcrowding in the motor B-segment, weaker MYR risks eroding margin and lack
of immediate catalysts. The price correction has made the stock more
attractive. It is now trading at more undemanding valuations of 11.7x FY12/15
(below the 5-year average of 12.6x), and backed by an attractive dividend yield
of 4-5% for FY14/15 from assuming a 65% dividend payout ( 2013 : 75%). We
believe, while the concerns are valid, they have been overblown &
reflected in the current price. Toyota appears to be able to defend its
market share as evidenced from their tremendous sales improvement since Sept
2013, driven by the overwhelming response to the new Vios & Altis. The
group now targets to achieve sales of more than 100k units for Toyota in
2014, higher than market’s expectation of 98k units. Besides this, there also
appears to be strong upside from its O&G segment. News flow has been
positive in the O&G industry, and UMWOG should register sustainable
strong growth given it’s the front runner for various local contracts for its
jack up fleets, continued focus on marginal oil fields and a dearth of
locally owned rigs; Opportunity to Accumulate, TP12.00 ( 13x FY15).
(AK)
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Calls for APRIL Week 3/Week 4 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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KKB (9466)
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24/4/2014
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RM2.58
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BUY
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RM2.80
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RM2.51
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-2.8%
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PERDANA (7108)
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24/4/2014
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RM1.91
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BUY
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RM2.30
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RM1.89
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-1.1%
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MAYBANK (1155)
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25/4/2014
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RM9.96
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Switch > RHBCAP
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-
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RM9.90
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-0.7%
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PERISAI (0047)
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25/4/2014
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RM1.63
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BUY
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RM1.88
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RM1.57
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-3.7%
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IOIGP (5249)
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28/4/2014
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RM2.69
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BUY
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RM3.40
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RM2.69
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0.0%
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IGB (1597)
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28/4/2014
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RM2.75
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ACCUMULATE
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RM3.20
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RM2.77
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+0.7%
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GAMUDA (5398)
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29/4/2014
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RM4.55
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BUY
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RM5.45
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RM4.61
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+1.3%
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SUNWAY (5211)
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29/4/2014
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RM3.15
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BUY
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RM3.50
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RM3.10
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-1.6%
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MISC (3816)
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30/4/2014
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RM6.39
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BUY
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RM7.10
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RM6.51
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+1.8%
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SEALINK (5145)
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30/4/2014
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RM0.465
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BUY
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RM0.57
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RM0.465
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-0.0%
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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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