Morning Call | 7 May 2013

FLOWS

Tuesday, 7 May, 2013

BUY

YTL, MRCB, LATEXX

SELL

MAYBANK, UOA, AMMB

STOCK ALERT

STOCK NAME

DATE

PRICE

BUY/SELL

TARGET PRICE

RHBCAP(1066)

7/5/2013

RM8.65

BUY

RM10.00

RHBCAP (8.65) – Post election, the stocks in the banking sector is expected to outperform in the market as we will see a restoration in business and consumer sentiments will be positive for loan growth and capital market activities as well as the ETP projects that will begin to take motion driving loan growth further. We continue to favour RHBCAP among the banking stocks as it’s relatively cheap (only  9.9x FY13 PE) compared to its domestic banking peers which trades at an average of 12x PE and is only trading at 1.3x P/b vs sector average of 2x. The fundamentals of the group will also be improved with fee based income boost from the combined OSK Investment Banking platform. MACD cutting upwards.  Accumulate with a TP of RM10.00 based on 1.5x P/b. BUY

GLOMAC(5020)

7/5/2013

RM1.01

BUY

RM1.16

Glomac (RM1.00) – The group has been showing improvement in results backed by stronger property sales from its flagship development in Puchong. So far, after the maiden phase and phase 2 sold out last year and phase 3 was about 90% sold out in January 2013, thus one can expect to see similar positive response from phase 4 that was launched in the beginning of April which they expect sales of phase 3 and 4 to be converted into sales by next quarter. YTD, Glomac has an unbilled sales of RM827 with remaining GDV of 5.76bil; The group is targeting to launch its first project within the planned 1.2b township in Vicinity of Cyberjaya/Putrajaya in the first half of FY14. Glomac currently trades at only 6.7x FY 13 PE and only 0.5x P/b. The group recorded a 15% 3-year dividend growth and pays a 5.5% div yield, indicating a steady growth in business. MACD turning up; break out resistance at RM1.04 with an upside target of RM1.16. With such attractive valuations, high div yield growth, and consistent earnings, we think reiterate a BUY.

Calls for APRIL Week 4/ May Week 1

STOCK

Initiation Dates

Initiation price

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

TENAGA(5347)

29/4/2013

RM7.83

TRIM

RM7.30

RM8.17

+4.3%

SPSETIA(8664)

29/4/2013

RM3.30

ACCUMULATE

RM4.40

RM3.72

+12.7%

PETGAS(6033)

30/4/2013

RM19.64

Sell into strength

RM18.50

RM20.00

+1.8%

PCHEM(5183)

30/4/2013

RM6.49

Sell into strength

RM6.00

RM6.60

+1.6%

WTK(4243)

02/5/2013

RM0.975

BUY

RM1.20

RM0.985

+1.0%

MPHB(3859)

02/5/2013

RM3.52

BUY

RM4.20

RM3.67

+4.2%

MISC(3816)

3/5/2013

RM4.30

BUY

RM4.97

RM4.42

+2.7%

PETDAG(5681)

3/5/2013

RM23.52

Trading SELL

RM20.00

RM24.26

+3.1%

TAMBUN(5191)

6/5/2013

RM0.94

ACCUMULATE

RM1.12

RM1.02

+8.5%

SENDAI(5205)

6/5/2013

RM1.07

BUY

RM1.41

RM1.21

+13%