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FLOWS
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Friday, 8 November, 2013
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BUY
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GENTING, TM, SPSETIA
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SELL
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TENAGA, SIME, MISC
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STOCK ALERT
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STOCK NAME
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DATE
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PRICE
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BUY/SELL
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TARGET PRICE
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MISC(3816)
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8/11/2013
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RM5.01
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ACCUMULATE
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RM5.50
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3Q13 results provided a glimpse of potential MISC
performance ahead especially its offshore division with the maiden
contribution from its 50% stake in Gemusut-Kakap floating production system
and the forthcoming Cendor FPSO from FY14. In addition, its tank terminal
division is expected to see higher earnings as the subsequent phases in
Tanjong Bin come into operation. The chemical segment has also turnaround
from higher freight rates & lower operating costs, while the petroleum
division saw lower losses from downsizing of vessel fleet & improvement
in rates. A further improvement in freight rates is expected in FY14 with a
Bloomberg survey of analysts forecasting the crude tanker rates for VLCC,
Suezmax & Aframax increasing 27%, 8% & 7% respectively in 2014.
The heavy engineering division continued to be a drag on earnings but FY14
will see a sharp turnaround with the huge Malikai tension-leg platform
project & the Block SK316 central processing platform job contributing to
the bottomline. With all segments showing signs of improvement coupled with a
decent valuation of 0.96x p/bk versus 5-year average of 1.39x, it is
opportunity to accumulate MISC in the current consolidation phase of the
market.
(LJN/PT)
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AAX(5238)
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8/11/2013
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RM1.09
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ACCUMULATE
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RM1.20
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Stock has retraced >6% the last 2 weeks on foreign selling
and is now holding near its support level at RM1.08. Its price performance
has a close correlation with sister company, AirAsia, but occasionally
trading with a lag of a couple of days. Recently, AirAsia corrected
from its high of RM2.97 and bottomed near its support of RM2.60 before
rebounding from there. If this correlation continues, which is highly likely
as they share similar operating parameters, it is timely to begin
accumulation of AAX. Operating metrics of AAX has also improved with oil price
down 16% since the end of August and the MYR has strengthen @ 5% over the
same period. The Q3 results would see significant improvement from the low of
Q2, and this will continue into Q4 which is seasonally the strongest in view
of the school holidays & the festive season. AAX trades at attractive
PERs of 9.7x for FY14 and 7.3x for FY15 on explosive earnings growth of 87%
& 34% for the same 2 FYs due its low base and first mover advantage in
the long haul LCC segment.
(LJN/PT)
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Calls for OCT Week 4 / NOV week 1
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STOCK
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Initiation Dates
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Initiation price
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BUY/SELL
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TARGET PRICE
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LAST PRICE
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% Change
since Initiated
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GTRONIC (7022)
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31/10/2013
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RM3.00
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ACCUMULATE
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RM3.50
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RM3.09
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+3.0%
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HUAYANG (5062)
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31/10/2013
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RM2.11
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BUY
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RM2.62
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RM2.13
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+0.9%
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AIRASIA (5099)
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1/11/2013
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RM2.68
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ACCUMULATE
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RM3.50
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RM2.64
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-1.4%
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COASTAL (5071)
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1/11/2013
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RM3.51
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TAKE PROFIT
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-
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RM3.53
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-0.5%
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ARMADA (5210)
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4/11/2013
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RM3.97
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ACCUMULATE
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RM4.50
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RM3.95
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-0.6%
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HARTA (5168)
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4/11/2013
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RM7.23
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TAKE PROFIT
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RM6.50
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RM7.31
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+1.1%
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JTIASA (4383)
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6/11/2013
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RM2.28
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SELL into Strength
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RM2.07
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RM2.47
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8.3%
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TUNEINS (5230)
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6/11/2013
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RM1.84
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ACCUMULATE
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RM2.20
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RM1.84
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0.0%
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GAMUDA (5398)
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7/11/2013
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RM4.82
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BUY on weakness
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RM5.30
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RM4.87
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+1.0%
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DIALOG (7277)
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7/11/2013
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RM2.74
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ACCUMULATE
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RM3.30
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RM2.90
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+5.8%
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HOLD
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CONT SELL
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SELL/ TAKE PROFIT
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CONT BUY
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STRONG BUY
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