MORNING CALL 11 JUNE
2012
FLOWS;
BUYS: Digi, CIMB, Airasia
SELLS: Sime, MPHB, TimeCom
Technical Stock Alert;
ENGTEK (RM1.89) - Daily trading volume has picked up
recently ahead of its EGM on the 12/6 for shareholders to vote on the proposal
by majority shareholder to buy over the company's HDD biz for RM2.00/share
(revised down from RM2.50/shr after the Thailand floods). The other major share
holders such as PNB 14.4% and LTH 8.3% could vote against this proposal after
seeing the recovery particularly in JCY's bottom line due to higher ASPs.
Engtek's own production is expected to normalize by 3Q this year and the
industry is not expecting ASPs to fall back to early 2011 depressed levels even
as production normalizes. But even based on the 1H 2011 depressed prices, ENGTEK should register earnings of
at least 24sen pa ie 8x PE currently. With practically no downside risk, we
rate it as a trading buy for a possibly revision back up on the offer price by
majority shareholders.
PERISAI (RM0.865) - Recently set a strong support level
of RM0.84 and short term MACD is showing signs of cutting u[upwards once again.
RSI remains below neutral at 43. A move back up could see it test an immediate
resistance level of RM0.92. A convincing breach above these levels could send
it back up higher to RM0.980-RM1.00 levels. Trading BUY
