FLOWS
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Thursday, 19 June, 2014
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BUY
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YTLP,
SKPETRO, TENAGA
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SELL
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SIME, SEM, AIRASIA
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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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TUNEINS (5230)
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19/6/2014
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RM2.34
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ACCUMULATE
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RM2.60
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The
share price has retraced c61% of its gain following the recent run up from
RM2.20 to RM2.52, after the release of it Q1 results. The group did not
disappoint with its Q1 numbers, although affected by Thailand’s political
deadlock as well as low underwriting margins (due to high staff cost &
reserving). The growth of the travel insurance business remains the key
driver, which remained strong in 1Q14, posting a 14%yoy increase in gross
premium. The causes of the lower underwriting mentioned above, ie higher
staff cost & reserving, are deemed temporary in nature. Margins are
expected to return to expansion on the back of continued travel insurance
demand that rides on its airline partners’ growth and new revenue streams
form JVs with Cozmo Travel and Osotspa Insurance. The pullback in share price
offers a cheaper entry point into the stock. Accumulate for its bright growth
prospects in the region, potential M&As in Thailand, entry into the
Middle East markets as well as benefit arising from the revamp of its non-life
business in Malaysia. Trading at 17.8x FY15 ( vs sector’s 14-20x valuation),
we deem the group should trade at a premium to sector valuation given the
catalysts it has; Accumulate TP RM2.60 ( based on 20x FY15).
(AK)
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JTIASA (4383)
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19/6/2014
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RM2.49
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ACCUMULATE
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RM2.94
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Share price is now at a 4 month low, after poor
9MFY14 showing where results trail, due to weaker than expected FFB output
and OER rate achieved at its mills. We believe the negatives have been
reflected in the price. Group is expected to deliver stronger earnings in 4Q as
FFB output should be stronger due to seasonality. FFB output is expected to
improve strongly in the following years (c30% in FY14, 20% in FY15 ), prime
mature areas to rise from 12% of planted area in FY13 to 50% by FY16.
There’s also evidnce of a strong rebound in the timber division, which should
provide reprieve during the transition period of the oil palm division. The
addition of 2 CPO mills is expected to reduce transportation cost
significantlt as well (estm at 40%). We understand that the group is making
aggressive efforts to improve FFB yield and the OER. Valuation is
undemanding, at 13x FY06/15, with short term rerating catalyst – Accumulate (
TP RM2.94, 15x FY15).
(AK)
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Calls for JUNE WEEK 2/ WEEK 3 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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PENERGY (5133)
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12/6/2014
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RM3.03
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SELL
into strength
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-
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RM3.10
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+2.3%
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WCT (9679)
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12/6/2014
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RM2.23
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ACCUMULATE
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RM2.80
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RM2.22
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-0.5%
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SUNSURIA (3743)
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13/6/2014
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RM1.41 / 0.84 (EA)
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ACCUMULATE
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RM1.10 (EA)
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RM1.30
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-6.4%
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PANTECH (5125)
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13/6/2014
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RM1.01
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ACCUMULATE
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RM1.30
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RM1.02
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1.0%
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UEMS (5148)
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16/6/2014
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RM2.07
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ACCUMULATE
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RM2.51
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RM2.12
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+2.4%
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MRCB (1651)
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16/6/2014
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RM1.62
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ACCUMULATE
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RM1.98
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RM1.61
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-0.7%
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WASEONG (5142)
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17/6/2014
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RM1.84
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BUY
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RM2.20
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RM1.78
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-3.3%
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MAXIS (6012)
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17/6/2014
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RM6.75
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TRIM
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-
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RM6.76
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+0.1%
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BAT (4162)
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18/6/2014
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RM69.24
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SELL
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RM62.00
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RM67.06
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-3.4%
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DAYANG (5141)
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18/6/2014
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RM3.51
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ACCUMULATE
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RM4.35
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RM3.54
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+0.8%
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Performance
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Positive
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Negative
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Neutral
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