Morning Calls | 31 Oct 2012

FLOWS

Wednesday, 31 October, 2012

BUY

PBBANK, CIMB, SIME, MRCB

SELL

IOICORP, MAXIS, IJM

Stock Alert

STOCK

DATE

PRICE

BUY/SELL

TARGET PRICE

SENDAI (5205)

31/10/2012

RM1.44

BUY

RM1.65

SENDAI (RM1.44): the share price has slid some 16% over the last 6 months. We see this as a buying opportunity. Co’s current OB stands at RM1.7b and has submitted RM12b in tenders with a historical success rate of c10-20%. We see continued job flows from the Middle East with Qatar as the main contributor, key catalyst being the 2022 FIFA World Cup in which about USD150b worth of infra projects have been lined up over the next 5-6 years. Abu Dhabi & Saudi Arabia are still spending heavily on infra works as well. Eversendai is also expanding into new markets - power plant projects in India & O&G steel fabrication works locally for offshore topside projects. Domestically, it may secure some RM500m worth of jobs, possibly in the power generation sector & MRT sub-contracts. Management has guided a 3-year earnings CAGR of 10-15%, aims to double revenue in the next 5 years while maintaining net margins at 11%. Trading at below 8x for FY12/13 vs sector average of c11-12x - BUY. (AK)

JTIASA (4383)

31/10/2012

RM2.33

Accumulate

RM2.60

JTIASA (RM2.33) : Co’s share price has pulled back some 24% over the past 4 months, significantly more than the recent sell-down in the plantation sector. We continue to like Jayatiasa for it’s young maturity profile, strong FFB growth & possible land-bank expansion going forward. It now has some 58,000ha planted of which 37,000ha have started producing. Its maturity profile stands at 36% immature, 57% young mature & 7% prime mature, which sets the stage for sustained FFB growth over the coming years. Although the performance of the timber segment has been affected by delay in Japanese reconstruction & weakening Indian Rupee, prospects remain positive in view of the tight log supply & anticipated increase in demand from Japan’s reconstruction efforts. Co’s trading at 11.6x for FY06/13, vs sector’s 13-14x -  Accumulate. (AK)

Calls for OCT Week 3 / Week 4

STOCK

Initiation Dates

PRICE

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

ARMADA (5210)

23/10/2012

RM3.70

BUY

RM4.20

RM3.94

6.49%

PMETAL (8869)

23/10/2012

RM1.75

Trading BUY

RM1.91

RM1.75

0.00%

SCABLE (5170)

24/10/2012

RM1.69

BUY

RM2.20

RM1.68

-0.59%

FABER (1368)

24/10/2012

RM1.49

Trading BUY

RM1.72

RM1.42

-4.70%

DIJACOR (5401)

25/10/2012

RM1.04

Trading BUY

RM1.20

RM1.05

0.96%

MAXIS (6012)

25/10/2012

RM6.89

BUY

RM 7.50

RM6.98

1.30%

TRC (5054)

29/10/2012

RM0.585

BUY

RM0.73

RM0.595

1.70%

MKLAND (8893)

29/10/2012

RM0.375

BUY

RM0.465

RM0.375

0.00%

DIALOG (7277)

30/10/2012

RM2.36

BUY

RM2.58

RM2.36

0.00%

GENM (4715)

30/10/2012

RM3.48

Accumulate

RM3.80

RM3.52

1.15%