Morning Call | 17 April 2013

FLOWS

Wednesday, 17 April, 2013

BUY

GENTING, IOIC, PERDANA

SELL

DIALOG, SKPETRO, KLK

STOCK ALERT

STOCK NAME

DATE

PRICE

BUY/SELL

TARGET PRICE

AIRPORT(5014)

17/4/2013

RM5.70

BUY on weakness

RM6.40

AIRPORT (RM5.70): Share price has retraced 7% from its peak of RM6.13 on 10th April which could partly be due to the delay in operations of KLIA2 to 28th Jun 2013. Despite the delay we believe prospects for AIRPORT remains bright supported by 1) booming aviation sector around the Asian region with increase traffic and rates from the commencement of KLIA2 and emergence of airlines such as Malindo air. 2) Potential investment tax allowance of circa RM3bn for capital costs spent on KLIA2. 3) Plans of factory outlet with Mitsui Fudosan Co Ltd on 50 acres land with further plans of auto city and F&B centre. 4) Further JV plans similar to WCT to monetize its 16,156 acres of undeveloped land in Sepang. These pipelines will keep the growth momentum intact while keeping CAPEX to the minimal as CAPEX will be borne by JV partners. Also, FY14 will likely see Airport free cash flow turn positive for the first time since FY07. Key support at RM5.60-70 level. BOW with TP: RM6.40 (TYK)

PLENITU(5075)

17/4/2013

RM1.97

Strong BUY

RM2.52

Plenitude (RM1.97): A cash rich property company totalling RM385.6mil or RM1.43 per share (72.5% of current share price) with strong property launches in the pipelines for JunFYE14 that will see 5 project with GDV worth RM1.27bn. This includes semi-detached homes and serviced apartments worth RM740mil within its Taman Desa Tebrau development in Johor Baru, as well as link houses in Taman Putra Prima, Puchong with a GDV of RM250 million. Plenitude has also completed refurbishing Tanjung Bungah Hotel and signed Sheraton Penang to operate a 5 star Hotel.   We see company as a Johor play as well as a deeply undervalued stock. Based on last annual report, company owns large tracts of land in Puchong, Tebrau, Sungei Petani and Penang Island (see Table Below). Just revaluing Sepang and Tebrau land at RM20psf would create surplus value of RM518mil. That would push its RNAV to RM5.05/share. Giving a 50% discount would yield a TP of RM2.52.   Landbank Held @ 30 June 2012 Area Land (acres) Value BV/psf Date Acquired Puchong/Sepang 157.11          19,608,375 2.87 24/3/1999 Puchong/Sepang 32.08          24,685,277 17.67 5/6/2009 Tebrau 280.34          33,943,836 2.78 25/10/2000 Kota Tinggi, Johor 255.72          34,859,119 3.13 25/2/2004 Batu Ferringgi 40.77          47,262,018 26.61 10/5/2010 Balik Pulau 52.63          41,554,951 18.13 27/9/2010 George Town 1.09          33,612,317 707.92 3/2/2012 Sungai Petani 769          36,763,133 1.10 10/11/2000 Annual Report 2012

Calls for APRIL Week 2-3

STOCK

Initiation Dates

Initiation price

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

KNM(7164)

10/4/2013

RM0.495

Trading BUY

RM0.60

RM0.480

-2.7%

YEELEE(5584)

10/4/2013

RM0.92

Trading BUY

RM1.10

RM0.89

-3.3%

DIALOG(7277)

11/4/2013

RM2.39

ACCUMULATE

RM2.80

RM2.39

0.0%

GBGAQRS(5226)

11/4/2013

RM0.94

ACCUMULATE

RM1.04

RM0.91

-3.2%

CMSB(2852)

12/4/2013

RM3.25

ACCUMULATE

RM3.53

RM3.19

-1.8%

TDM(2054)

12/4/2013

RM4.52

Trading SELL

RM3.90

RM4.39

-2.9%

AIRASIA(5099)

15/4/2013

RM2.84

Situational BUY

RM3.30

RM2.82

-0.7%

DIGI(6947)

15/4/2013

RM4.69

Technical BUY

RM5.08

RM4.68

-0.2%

TAGB(5158)

16/4/2013

RM0.245

ACCUMULATE

RM0.33

RM0.24

-2.0%

IJM-WC (3336WC)

16/4/2013

RM1.36

BUY

RM1.80-RM2.00

RM1.33

-2.2%