Morning Call | 17 Oct 2012

FLOWS

Wednesday, 17 October, 2012

BUY

MRCB, TM, UOADEV

SELL

ARMADA, GENTING, LATEXX

Stock Alert

STOCK

DATE

PRICE

BUY/SELL

TARGET PRICE

FITTERS (9318)

17/10/2012

RM0.685

Trading BUY

RM0.80

The share price has retreated c19% from its recent high in July. Fitters is the market leader of integrated fire fighting business in Malaysia. However, renewable energy has been identified as its next growth driver. It’s new engine of growth, ie third party green palm oil milling, has finally been set in motion with the first 2 signings in July 2012 (with Indonesia based Anglo-Eastern Plantation & Tradewinds Plantation). The earnings from these 3rd party green mill ventures will be felt from FY13 onwards (estimated to be from 7% of group profit in FY13 to 29% in FY14 & 40% in FY15). Management is targeting 2 third party green mills in FY13, 8 mills in FY14 & 14 mills in FY15. Other potential catalyst may come from the group’s specialist theme park works & maiden property development project in Setapak. Trading at just 5-6x for FY13

MRCB (1651)

17/10/2012

RM1.68

ACCUMULATE

RM1.90

Stock has drifted south c13% from its recent high of RM1.93 in July on the back of the pending GE as well as uncertainties on the EDL  takeover price & final terms of the impending Nusa Gapurna SB ( NGSB ) transaction. We believe this to be just a temporary drag on the stock. We see it unlikely that the disposal price of the EDL to be less that RM1.4b, thus no loss to MRCB. And subject to final terms, the NGSB deal may be value enhancing. As the KL Sentral development is nearing the tail end, group is also eyeing additional landbank in Klang Valley & Penang. Outstanding construction OB amounted to cRM2b & group is actively looking for more jobs ( from new building construction works & opportunities in MRT2 / MRT3 ). Trading at 23x & 17x multiples for FY13 & FY14, and 40% discount to RNAV of RM2.88 -

Calls for OCT Week 2 / Week 3

STOCK

Initiation Dates

PRICE

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

KOSSAN (7153)

10/10/2012

RM3.05

BUY

RM4.00

RM3.09

1.3%

BENALEC (5190)

10/10/2012

RM1.30

Trading BUY

RM1.43

RM1.32

1.5%

GENTING  (3182)

11/10/2012

RM8.65

LT Accumulate

RM10.20

RM8.81

1.7%

GLOMAC (5020)

11/10/2012

RM0.815

Mid Term BUY

RM0.865

RM0.815

0.00%

NAIM (5073)

12/10/2012

RM1.80

LT Accumulate

RM2.02

RM1.84

2.22%

YTL (4677)

12/10/2012

RM1.74

Mid Term BUY

RM1.92

RM1.74

0.0%

REDTONE (0032)

15/10/2012

RM0.395

Trading BUY

RM0.50

RM0.40

1.2%

3A (0012)

15/10/2012

RM1.10

ST BUY

RM1.25

RM1.19

7.6%%

DRBHICOM (1619)

16/10/2012

RM2.38

Trading BUY

RM2.60

RM2.40

0.8%

SILKHLD (5078)

16/10/2012

RM0.35

Trading BUY

RM0.41

RM0.365

4.2%