Morning Call | 27 March 2015

FLOWS		Friday, 27 March, 2015
BUY		AXIATA, SKPETRO, PCHEM
SELL		TENAGA, WPRTS, RHBCAP
STOCK ALERT
STOCK NAME	DATE			PRICE		BUY/SELL			TARGET PRICE
DELEUM (5132)	27/03/2015			RM1.55		ACCUMULATE			RM1.85
One of the more resilient O&G names, given 80-85% of its business are on a recurring basis. OB stands at a healthy RM3.9b which spans over the next 5-9 years, providing long term visibility. Group is conservatively looking at 2013-16 earnings CAGR of 15%, but could surprise on the upside if Petronas budget cuts are lower than expected. It is also a syariah compliant play and offers decent dividend yield of more than 4% for FY2015 & 16, unlike O&G peers. Balance Sheet remains conservative. Current share price weakness has brought valuation down to 8.3x for FY16, undemanding given the positives above. Other catalysts include securing new contracts in regional markets ( Indonesia, Brunei & Vietnam), better margins & M&A prospects – Accumulate TP RM1.85 ( 10x FY16 EPS). (AK)
MITRA (9571)	27/03/2015			RM1.60		BUY on weakness			RM2.00
Share price has consolidated well over the past 6 weeks following it’s sharp run-up, fuelled by strong earnings & exceptional job flows. Following the RM416m new jobs in first 3 months of 2015, OB stands at all time high of RM1.9b, which will last another 3 years. Group looks to be entering into a new and higher earnings base, possible growing at a 3-year CAGR of 35% between 2014-16. Despite the price run up, valuation remains undemanding, trading at FY16 PER of 8x, against small-cap peers fwd PER range of 8-10x. Also offers div yield of 3.5-4%. An attractive small cap construction pick, given the strong earnings visibility & sizeable OB – BOW. ( TP RM 2.00, 10x FY16 EPS). (AK)
Calls for MARCH WEEK 3/WEEK 4 2015
STOCK	Initiation Dates		Initiation price		BUY/SELL		TARGET PRICE	LAST PRICE		% Change since Initiated
UZMA (7250)	20/03/2015		RM2.01		BUY		RM2.50	RM2.24		+11.4%
MISC (3816)	20/03/2015		RM8.39		TRIM		-	RM8.40		+0.1%
TAMBUN (5191)	23/03/2015		RM1.84		ACCUMULATE		RM2.10	RM1.83		-0.6%
MMCCORP (2194)	23/03/2015		RM2.40		BUY		RM3.00	RM2.43		+1.2%
KNM (7164)	24/03/2015		RM0.635		ACCUMULATE		-	RM0.70		+10.2%
TAANN(5012)	24/03/2015		RM3.90		ACCUMULATE		RM4.50	RM3.88		-0.6%
JAKS (4723)	25/03/2015		RM0.54		ACCUMULATE		RM0.80	RM0.55		+1.8%
CHINWEL (5007)	25/03/2015		RM1.49		ACCUMULATE		RM1.75	RM1.49		+0.6%
GKENT (3204)	26/03/2015		RM1.27		Trading BUY		RM1.40	RM1.27		0.0%
TOPGLOV (7113)	26/03/2015		RM5.58		TAKE PROFIT		BB – RM4.70	RM5.59		+0.1%

 

 

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