Morning Call | 7 Jan 2013

FLOWS

Monday, 7 January, 2013

BUY

SIMe, AMMB, AXIATA

SELL

DIALOG, JCY, SIME

STOCK ALERT

STOCK NAME

DATE

PRICE

BUY/SELL

TARGET PRICE

RHBCAP (1066)

7/1/2013

RM7.77

BUY

RM8.40

Upon completion of the RHB/OSK merger, not only would RHBcap have the largest market share in terms of trading value (12%), RHB will have a total asset under management of RM26.9bn which is ranked no.4 in Malaysia, and also a regional platform for group to expand its investment banking business to other countries such as Singapore, Indonesia and Thaliand. Loan growth of the group for fy12 has been consistent with average of 12.6% vs 12% concensus. Currently trading at cheap valuations in terms of the sector at 9.7x PE, and 1.3p/b vs sector average of 12x PE and 2.0p/b.  BUY with a TP of RM8.30 which based on EPS 0.80 for fy12 and 10x FWD PE. (RL)

TIMECOM (5031)

7/1/2013

RM3.96

BUY

RM4.32

Counter recently spiked after the company announce a proposal to distribute up to 137.5mil DiGi shares to TDC shareholders on a basis of 6:25 TDC shares (est value of RM665.5mil). This is positive as it would unlock the true value of TDC’s stake in DiGi shares which has risen by 35% (300mil) since TDC acquired them. Looking ahead, Timecom’s 10 year agreement with Setia Haruman Technology to extend the group’s high-speed service to home and offices in the KV that ties in with the Astro B.yond and IPTV packages is expected to contribute positively to the group’s earning from 2013 onwards.   Currently trading at 16x Fy11 and would improve to 14x in fy12 with an EPS of 25 sens per share assuming earnings come inline for 4Q. BUY with a immediate TP of RM4.32 and eventually Rm4.60. (RL)

Calls for DEC WEEK 4/ JAN WEEK 1

STOCK

Initiation Dates

Initiation price

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

MAHSING (8583)

21/12/2012

RM2.16

Accumulate

RM2.50

RM2.13

-1.4%

QL (7084)

21/12/2012

RM3.07

BUY on Weakness

RM3.60

RM3.18

+3.5%

FGV (5222)

27/12/2012

RM4.67

SELL into Strength

RM4.30

RM4.61

-1.5%

AIRASIA (5099)

27/12/2012

RM2.53

Trading BUY

RM3.40

RM2.93

+13.4%

STAR (6084)

2/1/2013

RM2.58

BUY

RM3.00

RM2.70

+4.5%

BENALEC (5190)

2/1/2013

RM1.39

BUY

RM1.60

RM1.39

0.00%

GENTING (3182)

3/1/2013

RM9.29

BUY

RM9.82

RM9.51

+3.3%

IJM (3336)

3/1/2013

RM5.05

Trading BUY

RM5.40

RM5.12

+1.3%

MBMR (5983)

4/1/2013

RM3.37

Accumulate

RM4.00

RM3.35

-0.5%

PERDANA (7108)

4/1/2013

RM1.13

Trading BUY

RM1.30

RM1.10

-3.0%