Morning Call | 18 Oct 2012

FLOWS

Thursday, 18 October, 2012

BUY

MRCB, TM, CIMB

SELL

TENAGA, GENTING, AIRASIA

Stock Alert

STOCK

DATE

PRICE

BUY/SELL

TARGET PRICE

MAYBULK (5077)

18/10/2012

RM1.44

BUY

RM1.60

Factors continue to weigh in on the positive side for Maybulk in recent times. The company continued to remain profitable as evident in their 1H numbers despite the current difficult conditions. BDIY has since moved up significantly from a low in mid-September but has had little effect on Maybulk's share price which remains only 6% above its low of RM1.35. It war chest also continues to grow with sale of non-core assets adding another RM19m to its already impressive RM250m net cash. There could be opportunistic assets at distressed values that its funds could be utilised for as evident from its parent company's recent acquisition into Drydocks World SEA, who owns 3 shipyards in Batam and one in Singapore. Latest China Sept export numbers showing its fastest growth in 3 months also augur well for the industry. Technically it's RSI and MACD has been showing a positive divergence and we expect the stock to bounce off its double bottom to test an immediate target of RM1.60 before heading higher towards RM1.80. (DN)

PADINI (7052)

18/10/2012

RM1.89

BUY

RM2.10

Padini (RM1.89) –Recent 11.6% drop from RM2.11 level was coincidently in line with the opening of H&M in 2 local malls, Kuala Lumpur. We believe that the sell down was an over exaggeration upon the well-received opening of H&M in the nation and further panic selling on the back of concerns regarding its inventory. Padini has been in the country for about 30 years and it has showed its resistance towards new competitions from other countries such as cotton on, Giordano, Uniqlo, G2000 etc. Management remain confident and guided a net profit forecast of RM107 million (up 13% from RM94.9 million in FY12). Technical Indicators show that stock is widely oversold, RSI picked up yesterday, Stochastic triggering a buy call. Next resistance is the 100MA @ RM1.96. Div yield 4%.   (RL)

Calls for OCT Week 2 / Week 3

STOCK

Initiation Dates

PRICE

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

GENTING  (3182)

11/10/2012

RM8.65

LT Accumulate

RM10.20

RM8.80

1.7%

GLOMAC (5020)

11/10/2012

RM0.815

Mid Term BUY

RM0.865

RM0.825

1.2%

NAIM (5073)

12/10/2012

RM1.80

LT Accumulate

RM2.02

RM1.91

6.11%

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

RM0.39

-1.2%

3A (0012)

15/10/2012

RM1.10

ST BUY

RM1.25

RM1.20

9.0%

DRBHICOM (1619)

16/10/2012

RM2.38

Trading BUY

RM2.60

RM2.37

0.4%

SILKHLD (5078)

16/10/2012

RM0.35

Trading BUY

RM0.41

RM0.350

0.00%

FITTERS (9318)

17/10/2012

RM0.685

Trading BUY

RM0.80

RM0.685

0.00%

MRCB (1651)

17/10/2012

RM1.68

Accumulate

RM1.90

RM1.68

0.00%