MORNING CALL 27 JUNE
2012
FLOWS;
BUYS: MISC, Gamuda, IGB
SELLS: TNB, Sime, SPSetia
Technical Stock Alert;
1) PMETAL: stock has consolidated at it's current support
level of
RM1.80 for the past 6 weeks. We remain bullish on Co's transformational
growth prospects as the largest integrated aluminium producer in the ASEAN
region with an expanded capacity of 360,000 tonnes. Our positive outlook also
driven by group being the direct play on the roll out of Sarawak's Bakun Dam
& the long term supply of power from Bakun enhancing it's cost
competitiveness, with Bakun widely viewed as amongst the lowest cost hydro plants
in the region. With the funding program in place, it's likely that that the new
aluminium ( Phase 2) smelting plant in Samalaju is on track to be completed by
end 3Q12. The stock offers attractive forward valuations of 6-9x for FY12-FY14
EPS vs EPS CAGR of 23%. Near term catalyst includes the successful completion
of it's new smelter plant by end 3Q12 & crystallization of a formal PPA
with SEB - Accumulate.
(AK)
2) PERDANA: Expectations on Co remain depressed, with the
share price hovering not too far from it's all time low & trading at 0.6x
P/Bk. The share price has been sold down about 50% since Jan 2011,
understandable given the poor earnings delivery & uncertain direction of
the group's business operations. However, recent developments in the group
& pick-up in activity levels of the local O&G sector should translate
in better demand for Perdana's vessels over the medium term. We view the
PEnergy stake sale positively, and believe operations could also be on the
brink of a turnaround, following Dayang's entry as the single largest
shareholder at the end of last year. Although the net impact to earnings from
the PEnergy stake sale is neutral, we estimate net gearing to fall to 40% from
60% if transaction is done at market price. At PER of 10x & 7x for FY12
& FY13 and P/BK of 0.6x, stock offers a good buying opportunity - BUY.
(AK)
