Morning Call | 26 Sept 2012

FLOWS	WEDNESDAY, 26 Sept 2012
BUY	CIMB, SUPERMX, YTL
SELL	DIALOG, IOIC, PCHEM
Stock Alert
STOCK	DATE	PRICE	BUY/SELL	TARGET PRICE
IJM (3336)	26/9/2012	RM4.75	Trading BUY	RM4.92
Share price retreated 7% yesterday following its announcement that IJM will be acquiring up to 25% stake in O&G entity Scomi Group, comprising new shares & convertible bonds for up to RM149m. We feel the sell-down is excessive as move appears to be part of IJM’s strategic plan to gain a foothold in the O&G business, as well as possibly reap synergies from its prowess in rail related civil engineering works and Scomi Engineering ( Scomi’s 67% unit). We expect no immediate earnings impact as the initial 10% stake will place Scomi as a simple investment rather than associate. This is also not the first time IJM had bought stakes into other related companies, having done so with Keuro, Eversendai & fabricator Torsco SB prior. The RM39m initial investment is fairly small compared to IJM’s cash reserve of cRM1.8b & market cap of cRM7b. The sell-off has erased more that RM500m off IJM’s market cap which we feel is overdone. We advise a trading buy around the RM4.60 levels with an exit above the RM4.80 levels ahead of a company briefing today when more clarity to its positioning in Scomi is expected. (AK)
CANONE (5105)	26/9/2012	RM2.54	ACCUMULATE	RM3.20
The stock is down to its lowest levels since touching a year high of RM3.16 in early July when we started to see board room changes in Kian Joo. With the acquisition of 32% in Kian Joo finalized, Can One will be able to factor in part of Kian Joo’s earnings and see potential synergies for their own general can business and Kian Joo’s aluminium can products. Net earnings for this year is expected to reach RM50m, which equates to 7.7x PE based on current prices. Current weakness presents an ideal opportunity to accumulate the stock for long term growth. Immediate target of RM3.20. (DN)
Calls for SEPT Week 3
STOCK	DATE	PRICE	BUY/SELL	TARGET PRICE
BURSA (1818)	19/9/2012	RM6.22	BUY	RM6.60
MUDAJYA (5085)	19/9/2012	RM2.70	BUY	RM3.02
PPB (4065)	20/9/2012	RM12.14	BUY	RM13.10
MAS (3786)	20/9/2012	RM1.01	Trading BUY	RM1.16
PHARMA (7081)	21/9/2012	RM7.43	Accumulate	MidTerm TP - RM8.80
DAYANG (5141)	21/9/2012	RM2.00	BUY	RM2.20
KLK (2445)	24/9/2012	RM22.06	TRIM	RM20.00
MAYBULK (5077)	24/9/2012	RM1.41	BUY	RM1.60
KULIM (2003)	25/9/2012	RM4.68	BUY	RM5.00
GENM (4715)	25/9/2012	RM3.40	ACCUMULATE	RM3.60