MORNING CALL 25 JUNE
2012
FLOWS;
BUYS: SKPet,
Maybank, JCY
SELLS: TNB,
UEMLand, Digi
Technical Stock Alert;
1) MEGB
(RM0.89) - The stock has been punished to the tune of 30% this year from its high of RM1.24 to a low of RM0.87 on
its continued weakness to its profitability. Its price however has managed to
find some stability around current levels for the past two weeks with its RSI
hovering around the 30 levels and MACD threatening to cut upwards. M&A in
the form of selling stakes in the 5 campus it owns could be a rerating trigger
and the management has stated they are open to this idea. Trading at a discount
to its RNAV of approximately RM1.15, we rate this a trading buy with a upside
of RM1.00 and a stop loss support of RM0.85.
2) SENDAI
(RM1.60) - Expected to clinch the structural steel works worth RM850m from the USD6bn ADIA expansion project which
will see their grp's outstanding orderbk jump to RM2.8b fr RM1.9b. At RM2.8b,
it's on par with the big cap construction player WCT which is trading at fwd
PER of 11x vs Sendai's fwd PER of 9.5x. Still trading below its IPO price of RM1.70 and stock has fallen a good 12% fr its peak,
trading buy
(LJL)
