Morning Call | 28 June 2013

FLOWS

Friday, 28 June 2013

BUY

CIMB, KLK, YTL

SELL

DIALOG, IOICORP, RHBCAP

STOCK ALERT

STOCK NAME

DATE

PRICE

BUY/SELL

TARGET PRICE

UEMS(5148)

28/6/2013

RM3.08

Trading SELL

BUYBACK RM < 2.60

Recently the property sector is fraud with policy risks with expectations of the central bank taking steps to stem out speculation and temper the heated property market, especially the Johor Iskandar region where demand is further fuelled by Singaporeans. The Johor government has also sounded out that they will be increasing property taxes in Johor with foreigners bearing higher rates than the locals. UEMS trades at a premium in the property sector with prospective PER of 25x & 24x for the next 2 financial years compared to sector PER of 18x & 16x; and discount to RNAV of 12% versus property sector’s 25%-35% discount toRNAV. UEMS has also seen its foreign shareholding increase quite significantly for the last 6 months, hence would be relatively more vulnerable in the current environment where the foreign funds are exiting the emerging markets. Technically, the stock broke down from the RM3.19 neckline of its head & shoulder formation with a minimum downside target of RM2.75 - this is within with the upside gap of RM2.53-RM2.82 which is yet to be filled. Trading sell & buy back <RM2.60. (PT)

SILKHLD(5078)

28/6/2013

RM0.395

BUY

RM0.50

Derives 80% of its revenue and >100% of its PBT from the oil & gas sector. Its other legacy business being the operator & concessionaire of the SILK Highway which has been loss-making since its inception, although the losses have been reduced in recent years due to the increasing traffic. This stock is a major laggard in the O&G sector with strong operating leverage in the next few years from its offshore vessels fleet expansion programme. SILKHDG’s fleet size was increased by 1/3 from 12 to 18 offshore vessels late last year and it has purchased an additional 3 AHTs vessels to be delivered from the 2H’2013 to early 2014. In addition, SILKHDG is enjoying vastly improved chartering rates compared to last year. There has also been an ownership change last year and the addition of the ex-Chairman of Bursa, Mohammed Azlan Hashim, early this year. The influential Mohammed Azlan, coupled with the fact that SILKHDG has no institutional following currently, and an O&G stock with a story to tell is a potent brew for its future price performance. Buy (PT)

Calls for JUNE Week 3 & 4

STOCK

Initiation Dates

Initiation price

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

IHH(5225)

21/6/2013

RM4.03

TAKE PROFIT

-

RM3.89

-3.5%

E&O(3417)

21/6/2013

RM1.84

BUY

RM2.05

RM2.03

+10.3%

FAVCO(7229)

24/6/2013

RM2.86

ACCUMULATE

RM3.40

RM2.87

+0.3%

TROP-WA(5401WA)

24/6/2013

RM0.865

Trading BUY

RM1.50

RM0.84

-2.9%

KOSSAN(7153)

25/6/2013

RM4.81

SELL into Strength

RM4.00

RM4.92 (ex)

+2.2%

AIRASIA(5099)

25/6/2013

RM3.06

ACCUMULATE

RM3.60

RM3.08

+0.6%

GAMUDA(5398)

26/6/2013

RM4.45

ACCUMULATE

RM5.20

RM4.56

+2.4%

SKPETRO(5218)

26/6/2013

RM3.86

ACCUMULATE

RM4.50

RM3.97

+2.8%

UOADEV(5200)

27/6/2013

RM2.23

BUY

RM2.70

RM2.32

+4.0%

LIONIND(4235)

27/6/2013

RM0.975

BUY

RM1.40

RM0.99

+1.5%