MORNING CALL 25 JULY
2012
FLOWS;
BUYS: CIMB, IOIC,
Digi
SELLS: KNM, JCY,
SIME
Technical Stock Alert;
PPB (RM15.20) - Stock has been on a downward slump since
achieving a high of RM19.58 in Sept 2010. The downward channel looks likely to
continue with a medium term target of RM14.00. The current bleak outlook in
China coupled with weaker outlook for Wilmar will be reflected in its 2Q
numbers due late Aug. Its ability to payout higher dividend will also be
impacted by the recent expansion and higher capex spending. Valuations remain high at 19.3x. Trim
Crestbuilders (RM1.06): CBH has lost some 12% from it's
recent high of RM1.19 ( July 2 2012). We believe CBH is at it's
inflection point, with re-rating catalyst as it moves from it's traditional
business construction business into property development via it's Prasarana
awarded redevelopment project of the Dang Wangi LRT station worth a GDV RM1b.
This is the 1st major award from Prasarana "rail plus property"
project, involving a total of 40-50 available MRT/LRT
station sites. We like CBH's ability to secure such a catalytic project &
expect more to come. Upon finalizing the financing structure, we expect the group
to lock in more "rail plus property" projects. It was also reported
that CBH is close to securing the MRB's land development in Jalan Ampang, GDV
RM1b. Given it's track record of developing quality high rise properties such
as Menara Worldwide, Menara Binjai, The Residence TTDI & Twins Damansara,
CBH has it's strength in property development, but may lack the ability to
market it. Trading at FY12 2013 PE of 7.1x, RSI at 41, BOW.
(AK)