MORNING CALL 6 JULY 2012
FLOWS;
BUYS: Maybank, PChem, Axiata
SELLS: BJtoto, MISC, DRBHcm
Technical Stock Alert;
KIAN JOO (RM2.53) - The share price performance has far
exceeded our expectations since our initial call on 2 June at RM1.95 (cum div
of 6.25sen div). Although current valuations remain reasonable at 9.4x PE and
yield of 5.9%, its price is likely to consolidate with an immediate support of
RM2.30. RSI is in an overbought position of 80 and a wide divergence of its LT
MACD above the ST. Hence we rate it currently a trading sell but we remain long
term bullish with a higher target price of RM2.80 on the back of the
commissioning of its new 2 can piece line in Nilai which would add a further
700m cans/year to capacity (with an option to upgrade to 1.5bil cans/year) from
the current two old lines of 950m cans. The more efficient new line will enable
the company to tap into tie ups again with Coke (with left after the separation
with F&N) and Pepsi (who is currently encountering supply problems with
KJoo's competitor.)
(DN)
APM (RM4.73) - technically attractive as RSI and MACD
severely oversold and uptrend channel intact. Currently at 50SMA support lvl,
stock is supported by cash pile of RM361m which translates to PER'12 of mere 4x
(ex cash) v auto parts manuf ave PER of 6x and BV RM4.30. Expect a pick up in
orders as it's supplying integrated systems to VW commencing in 4Q12. Also, Co
needs to utilize S108 tax credits by latest end 2013 which promises an
attractive div payout. Current yield ~4.5%. BUY
(LJN)
