FLOWS
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Friday, 15 November, 2013
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BUY
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DIGI,
CIMB, TUNEINS
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SELL
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MAHSING, UNISEM,
TIMECOM
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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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WASEONG (5142)
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15/11/2013
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RM1.70
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ACCUMULATE
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RM2.00
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Subsequent to the sell down
in August, Waseong has traded in a sideway band with minimum correlation to
the broad market which denotes a possible low beta defensive play in the
current market sell-down. Valuations are supportive compared to 5-year
historical averages and its O&G sector’s small to mid-cap peers. Waseong
trades at a p/bk of 1.34x & FY14 PER of 12.4x versus 5-year historical
average p/bk & PER of 1.52x & 21.2x, and its peers average FY14 PER
of 13.1x. After the slow start in the 1H13 due to a lack of contract wins in
FY12, the results will improve strongly in the 2nd half with about
RM900m high margin contracts secured in the earlier part of FY13. The
acquisition of 26.9% associate Petra Energy will also provide better
stability to its earnings with its longer term nature of its hook-up &
commissioning and marginal contracts compared to Waseong’s project-based
income. Rerating catalyst would be job wins from its tenders (worth
RM4b-RM5b) which include the Malikai deep water pipe-coating & Australian
Gorgon Phase 2. Accumulate
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PERDANA (7108)
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15/11/2013
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RM1.94
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BUY
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RM2.30
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The recent market correction
has brought down Perdana to the 38.2% retracement of its recent up move from
RM1.76 to RM 2.07. As seen from the 1H13 results, once the company has
covered its fixed overheads with the achieving of that critical mass, a large
portion of the gains in revenue from higher utilization & charter rates
go straight to the bottom line. We expect this phenomenon to continue into
the second half as the management has guided further of better utilization
rates couple with the new contracts that were secured at higher charter rates.
Multiple expansions may not be discounted as Perdana is seeing higher
visibility of earnings with 65% of the working vessels on long-term charters.
Accumulate ahead of the EGM on 19/11/13 to approve the proposed 2:5 bonus
issue and the subsequent announcement of the ex date which normally improves
sentiment of the stock. Perdana is also attractive on a valuation basis with
FY14 & FY15 PER of 12.1x & 10.6x versus peers average of 13.1x &
10.7x.
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Calls for NOV week 1/ Week 2
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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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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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RM5.14
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+2.5%
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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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RM1.07
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-1.9%
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DRBHCOM(1619)
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11/11/2013
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RM2.56
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BUY
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RM2.83
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RM2.51
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-2.0%
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AXIATA(6888)
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11/11/2013
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RM6.86
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SELL
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RM6.40
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RM6.84
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-0.2%
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BHIC (8133)
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12/11/2013
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RM2.65
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ACCUMULATE
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RM3.20
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RM2.77
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+4.5%
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GHLSYS(0021)
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12/11/2013
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RM0.885
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Take Profit
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-
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RM0.835
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-5.7%
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E&O(3417)
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13/11/2013
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RM2.01
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Trading BUY
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RM4.20
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RM1.94
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-3.5%
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BJFOOD(5196)
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13/11/2013
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RM1.63
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ACCUMULATE
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RM2.07
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RM1.64
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+0.6%
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NAIM (5073)
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14/11/2013
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RM3.56
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ACCUMULATE
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RM5.12
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RM3.61
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+1.4%
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ALAM (5115)
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14/11/2013
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RM1.40
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Technical BUY
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RM1.68
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RM1.45
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+3.5%
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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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