Morning Call | 6 May 2013

FLOWS

Friday, 6 May, 2013

BUY

CIMB, GAMUDA, IOIC

SELL

IJM, SPSETIA, TM

STOCK ALERT

STOCK NAME

DATE

PRICE

BUY/SELL

TARGET PRICE

TAMBUN(5191)

6/5/2013

RM0.94

ACCUMULATE

RM1.12

Despite the strong performance ( share price +56% over the past 6 months), we reckon the strong growth prospect of Co has not been fully priced in. The 600 acre anchor landbank in Simpang Empat where Pearl City, it's crown jewel sits, has a total GDV of RM3b ( commenced 2009 and expected to be completed in 2020), thus providing earnings visibility. The upcoming opening of the Penang Second Bridge in September 2013 will provide significant economic impact at the Batu Kawan area. Tambun's value is underpinned further by its capable management ( team completed development worth RM2.1b to date), quality products ( upside in pricing suggesting margin enhancement), strong Balance Sheet ( net cash cR90m ) & attractive dividend yield of c6-7%. Co is currently trading at about 5.9x FY13 ( 40% discount to the mid to small cap average PE of c9-10x) - Accumulate TP RM1.12  (based on PE6.6x FY14 )

SENDAI(5205)

6/5/2013

RM1.07

BUY

RM1.41

The share price has corrected c26% over the past month, after the sharp run-up to RM1.44 in early April 2013. Co recently announced that it had secured it's maiden project in Azerbaijan worth RM87m, bringing YTD jobs secured to RM412m & outstanding OB close to RM2b, which could last it for another 2-3 years. Management has guided that it was in line for further contract wins in the region. Over the past year, the share price has retreated c32% from its peak of RM1.64 in June 2012. Group remains a good proxy to the infrastructure boom in the Middle East (esp Qatar, who's racing to build buildings & infrastructure ahead of the 2022 FIFA World Cup) as well as the Klang Valley MRT domestically for structural steel works for stations. It remains a preferred structural steel specialist for international contractors & we like the potential of it moving into O&G sector via its investment in Technics. Trading at just 6.1x FY12/13 -  Buy TP RM1.41 (PE 7.5x FY12/14)

Calls for APRIL Week 4/ May Week 1

STOCK

Initiation Dates

Initiation price

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

MUHIBAH(5703)

26/4/2013

RM1.12

ACCUMULATE

RM1.60

RM1.10

-1.8%

MAYBULK(5077)

26/4/2013

RM1.53

BUY on weakness

RM1.80

RM1.48

-3.3%

TENAGA(5347)

29/4/2013

RM7.83

TRIM

RM7.30

RM7.78

-0.5%

SPSETIA(8664)

29/4/2013

RM3.30

ACCUMULATE

RM4.40

RM3.50

+6.0%

PETGAS(6033)

30/4/2013

RM19.64

Sell into strength

RM18.50

RM18.56

+5.8%

PCHEM(5183)

30/4/2013

RM6.49

Sell into strength

RM6.00

RM6.48

-0.1%

WTK(4243)

02/5/2013

RM0.975

BUY

RM1.20

RM0.955

-2.0%

MPHB(3859)

02/5/2013

RM3.52

BUY

RM4.20

RM3.46

-1.7%

MISC(3816)

3/5/2013

RM4.30

BUY

RM4.97

RM4.32

+0.5%

PETDAG(5681)

3/5/2013

RM23.52

Trading SELL

RM20.00

RM23.20

-1.3%