Morning Call | 28 Feb 2013

FLOWS

Thursday, 28 February, 2013

BUY

SIME, UEMLAND, YTL

SELL

JCY, MAYBANK, MRCB

STOCK ALERT

STOCK NAME

DATE

PRICE

BUY/SELL

TARGET PRICE

SCOMI(7158)

28/2/2013

RM0.315

BUY

RM0.37

Scomi(0.315) – a trading buy as technically constructive after its recent pullback from 0.445 to its 61.8% retracement level of 0.30, added to the positive crossover of its macd yesterday. The current entry price is also attractive compared to the initial placement of 119m shares to IJM at 0.33 and the RM110m financing raised through a convertible bond issue to IJM that has an even higher exercise price of 0.365. IJM will hold 25% of Scomi post its exercise of its convertible bonds, hence one can safely assume IJM would have access to the financials  and would have done their due diligence before injecting RM150m into Scomi. Based on the annualized 9 months earnings, Scomi is trading at 7.9x PER which is cheap compared to the other oil & gas mid cap stocks. In addition, Scomi is tipped for a Pan Malaysian  RM2.3bn drilling fluids contract from Petronas and its PSC partners.

PUNCAK(6807)

28/2/2013

RM1.35

Switch

RM1.60

Puncak(1.35) – we are recommending a pare trade, a switch between 2 water sector stocks, sell Jaks to finance the purchase of Puncak. Both stocks respond to  news in the water sector but with current fundamentals,  Puncak has significantly better upside. With the recent Selangor state government’s offer, Puncak has a potential RNAV of between RM2.40 to RM3.30, depending on the assumptions of net debts & amount of government grant. In the event that Selangor state reverts back to BN, it would even be more positive for Puncak as the water concessions were secured during the BN state government . Currently, Puncak trades at a historical PER of 2x while Jaks trades at 55x.

Calls for FEB WEEK 3/4

STOCK

Initiation Dates

Initiation price

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

SPSETIA(8664)

20/2/2013

RM3.38

Take profit

-

RM3.18

-6.2%

GENTING(3182)

20/2/2013

RM9.64

SELL into Strength

RM9.00 <

RM9.42

-2.3%

DAYA(0091)

22/2/2013

RM0.205

Trading BUY

0.26

RM0.200

-1.2%

DRBHICOM(1619)

22/2/2013

RM2.49

BUY on Weakness

RM2.80

RM2.56

+3.0%

AMFIRST(5120)

25/2/2013

RM1.06

Defensive BUY

RM1.10

RM1.07

+1.0%

AZRB(7078)

25/2/2013

RM0.69

TRIM

-

RM0.69

0.00%

AMBANK(1015)

26/2/2013

RM6.29

ACCUMULATE

RM6.50

RM6.26

-0.4%

TM(4863)

26/2/2013

RM5.32

ACCUMULATE

RM6.00

RM5.32

+0.0%

UZMA(7250)

27/2/2013

RM1.65

Trading BUY

RM2.00

RM1.61

-2.6%

BSTEAD(2771)

27/2/2013

RM4.75

ACCUMULATE

RM5.20

RM4.78

+0.7%