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FLOWS
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Wednesday, 6th November
2013
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BUY
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CIMB, IOICORP, MAYBANK
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SELL
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DIALOG, JCY, KLK
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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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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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The
share price has surged c7% over the past 2 days, partly on the back of firmer
CPO prices which climbed 7% over the last week. This rise in CPO prices was
due to expectations that palm oil production could soften in the coming
months due to seasonal factors & that Malaysia could be implementing B7
biodiesel policy by 2014. We reckon the buying has been overdone. At current
CPO prices, the disparity between CPO & soybean oil is only at c9%,
compared to the 5 year average of 17%. Recall also that in the FY06/13
results reported, group only achieved 53% of consensus estimates, due to
disappointing losses in the plantation division. Although in the timber
division, log prices are holding up & are awaiting plywood price
re-rating, it only form about a third of group earnings with plantation
making up the balance. JTiasa’s long term prospects remain in-tact (favorable
age profile of oil palm trees & operational cost savings from new mills),
but we see limited catalysts in the plantation sector currently to suggest
CPO prices will continue on the uptrend. RSI at 75 – Opportunity to Sell into
Strength (Possible buyback at RM 2.07, 18x FY06/14 EPS) .
(AK)
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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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After the 7% pullback in price
over the last 2 weeks, group is now trading at PER of c17X FY12/14. We
consider this a good opportunity to buy into the stock. Management is still
focused on enhancing profitability via portfolio rebalancing & good
claims management as well as expanding its online travel insurance business.
It guided that 2HCY13 could offer more upside to its business expansion (
travel insurance reach to 18 markets, in line with AirAsia’s expansion
plans). The period could also witness the roll-out of new products &
possible tie ups with other major travel providers. The general insurance arm
is working on improving its underwriting margins & maintaining its claim
ratios at a targeted 65% (in line with industry). On M&As, apart from
Thailand & Indonesia, group is also exploring opporunities in Taiwan,
South Korea & Brunei ( positive as do not expect big capital outlays as
Tune will only need to buy a small player to secure the needed license).
Numerous catalysts ahead, include high take-up rate in the online
business, better claims ratio, potential acquisitions opportunities, new customer
segment & higher dividend payouts. RSI at 25 – Accumulate ( TP RM 2.20,
20x FY14 ).
(AK)
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Calls for OCT Week 3/ Week 4
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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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MAGNUM (3859)
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29/10/2013
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RM3.31
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Trading BUY
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RM3.60
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RM3.28
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-0.9%
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KPJ (5878)
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29/10/2013
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RM6.15
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ACCUMULATE
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RM6.80
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RM6.21
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+0.9%
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IJM (3336)
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30/10/2013
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RM5.84
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ACCUMULATE
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RM6.70
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RM5.79
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-0.9%
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UOADEV (5200)
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30/10/2013
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RM2.22
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BUY
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RM2.68
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RM2.20
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-1.0%
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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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RM3.06
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+2.0%
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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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RM2.17
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+2.8%
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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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RM2.62
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+2.3%
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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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RM3.43
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-2.3%
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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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RM3.97
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0.0%
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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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RM7.22
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-0.2%
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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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