MORNING CALL 1 JUNE
2012
FLOWS;
BUYS: YTL, MRCB, UEM
SELLS: Maybank, CIMB, AMMB
Technical Stock Alert;
ALAM (RM0.525) - Share price broke its RM0.70 support on
the 14th May ahead of a weaker 1Q which only came in at 13% of market
consensus. Share price bottomed at RM0.495 (18th May) and we believe
this offers a buying opportunity given 1Q is a seasonally weaker quarter with
earnings expected to recover in the following quarters especially from its
RM145mil pipelaying job in Sabah which started in March. Orderbook
replenishment has been strong with this week job awards totalling RM247mil
bringing ytd to RM362mil and achieving 82% of targeted replenishment of
RM440mil. Valuation is undemanding trading at PE of 7.4x FY12 and 6xFY13 while
P/B trades near 2008 levels of 0.8x. RSI is low at 28 with MACD cutting upward.
BUY
(TYK/AK)
KIAN JOO (RM1.95) - Valuations are at historical lows
largely due to the on going legal tussel. The company has however taken all
these incidences in its strides and continues to provide strong top line growth
and at the same time improve productivity recording EBITA margins above 13%. The price has been moving steadily higher
after touching a year low of RM1.83, triggered by strong 1Q numbers. The
company has also since declared a final dividend of 2.5sen and 3.75sen special
ex on 22 June. Trading at only 6.6x PE based on current year earning and
yielding 7.2% (based on 50% payout ratio) we recommend accumulate with an
upside target of 6% yield or RM2.32.
(DN/LJN)
