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FLOWS
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Friday, 20 June, 2014
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BUY
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MISC,
YTL, MAYBANK
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SELL
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SKPETRO, IHH, AXIATA
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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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PERDANA (7108)
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20/6/2014
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RM1.80
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ACCUMULATE
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RM2.10
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Persistent geopolitical tensions in Iraq, Libya and
Ukraine/Russia will keep Brent crude pricing elevated and encourage increased
exploration & operational activities in the oil & gas industry which
is positive for the supporting services industry, including the offshore
marine supply sector. This will alleviate the fear of declining chartering
rates for offshore supply vessels following the Petronas’ CEO statement of
expecting lower charter rates ahead. Higher Brent crude prices will increase
Petronas’ margin hence a lesser need to pressure its service providers for lower
rates. Due to these developments, there has been a perk up in prices &
trading activities of the O&G stocks of which Perdana has seen a sharp
increase in volume yesterday & a potential take-out of its immediate
resistance at RM1.80. Fundamentally, Perdana has confirmed its solid
operational improvements from its recent set of results as once the company
has covered its fixed costs on achieving the critical mass, a large portion
of the gains in revenue from higher utilization & charter rates go straight
to the bottom line. We expect this phenomenon to continue into this FY
results as the management has guided better utilization rates couple with the
new contracts secured at higher charter rates. Perdana is also seeing
higher visibility of earnings with 65% of the working vessels on long-term
charters. Management has also indicated that their emphasis is now on
EOR-related jobs where Petronas & its PSC partners are budgeting to spend
RM30b over the next 30 years and the better stability offered in brownfield
projects. It is currently bidding to supply vessel to a Shell EOR job (St
Joseph’s) where award is expected by 2H14. Perdana is also attractive on a
valuation basis with FY14 & FY15 PER of 13.7x & 11.7x. Accumulate
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ALAM (5115)
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20/6/2014
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RM1.56
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ACCUMULATE
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RM2.10
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Stock is
consolidating in a symmetrical triangle pattern for the last 2 months within
a larger ascending triangle pattern which goes back
to July'13. The current consolidation appears to be a
potential final leg as it is approaching the apex of its
triangle pattern, to be followed by a resolution to the upside with
a target of RM2.10. Fundamentally, Alam is trading at a discount
compared to its mid and small cap peers with FY14 & FY15 PER of 13.3x
& 11.5x versus its peers average of 19.7x & 13.3x. Alam has an
orderbook of RM1.2b and a tender book of RM2b with 20% success rate. Alam is
targeting revenue growth next year from the new diving support vessel
acquisition which will be funded from the proceeds of the recent placement of
shares to Hong Leong Co & Caprice Capital which would mean corporate
& project tie-ups with TH Heavy Engineering, Scomi Energy &
Singapore-listed Ezion Holdings. Accumulate
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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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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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RM1.31
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-7.1%
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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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RM1.08
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+6.9%
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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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RM2.11
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+1.9%
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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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RM1.62
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0.0%
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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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RM1.80
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-2.2%
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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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RM6.75
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0.0%
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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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RM67.50
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-2.6%
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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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RM3.55
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+1.1%
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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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RM2.32
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-0.9%
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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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RM2.49
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0.0%
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Performance
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Positive
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Negative
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Neutral
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