Tuesday, October 28, 2014

Morning Call | 28 October 2014

FLOWS
Tuesday, 28 October, 2014
BUY
AXIATA, IJM SKPETRO
SELL
MAYBANK, MAXIS, IOIPG
STOCK ALERT
STOCK NAME
DATE
PRICE
BUY/SELL
TARGET PRICE
TGUAN(7034)
28/10/2014
RM2.00
ACCUMULATE
RM2.48
This plastic film manufacturer has just under gone a capital raising exercise of 1 ICULS : 2 shares basis with 1 free warrant : 2 ICULS to partly fund its RM100m expansion plans. The new manufacturing facility will enable the company to focus more on thin stretch film plastic wrapping products mainly for export to Japan, gaining higher margins. Valuations are now back to compelling levels of 10.9x (2015) and 8.3x (2016) on a fully diluted basis (ICULS only convertible from 3rd yr basis) supported by a decent yield of 4%. Accumulate with valuation likely to trend closer to industry average of 13.5x or RM2.48.
(DN)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MAXIS (6012)  
28/10/2014
RM6.68
Switch - DIGI
-
Maxis – the recent turmoil in financial markets has sent its price back closer to its resistance levels of RM6.70, as investors seek shelter in telcos. This has provided the perfect opportunity to lighten positions in this company which has been trading on a down trend for most of the year on the back of weaker guidance by management on its immediate future. Last few qtrs has revealed contracting subs base and toppish EBITA margins. Management will also start paying out div next year based on free cash flow basis and not the expected 40c/yr in the past. Maxis has a high capex profile for the immediate period as it embarks on network modernization for its 4G offering with forward dividend forecast ranging from 27c-32c. We are recommending a switch to Digi for a more stable business structure and sustainable yield of 4.5%.
(DN)
 
 
 
Calls for SEPT OCT WEEK 2 / WEEK 3 2014
STOCK
Initiation Dates
Initiation price
BUY/SELL
TARGET PRICE
LAST PRICE
% Change since Initiated
ASTRO (6399)
20/10/2014
RM3.22
TRIM
-
RM3.26
+1.2%
BJFOOD (5196) 
20/10/2014
RM2.75
ACCUMULATE
RM3.45
RM2.88
+4.7%
PENERGY (5133)
21/10/2014
RM2.42
BUY
RM2.80
RM2.68
+10.7%
TIMECOM (5031) 
21/10/2014
RM5.00
SELL
BB - RM4.30
RM4.92
-1.6%
ARMADA (5210)
23/10/2014
RM1.47
BUY
RM1.80
RM1.62
+10.2%
PCHEM (5183) 
23/10/2014
RM5.93
ACCUMULATE
RM6.45
RM6.00
+1.1%
HOVID (7213)
24/10/2014
RM0.375
Defensive BUY
RM0.43
RM0.390
+4.0%
PADINI (7052) 
24/10/2014
RM1.67
BUY on weakness
RM2.10
RM1.79
+7.1%
MHB (5186)
27/10/2014
RM2.32
ACCUMULATE
RM2.68
RM2.40
+3.4%
IJMLAND (5215) 
27/10/2014
RM3.30
ACCUMULATE
RM3.60
RM3.40
+3.1%
 
 
Performance
Positive
 
Negative
 
Neutral