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FLOWS
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Tuesday, 17 December, 2013
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BUY
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PCHEM,
SKPETRO, AXIATA
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SELL
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TM, SIME, HLBANK
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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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DRBHCOM (1619)
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17/12/2013
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RM2.74
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BUY
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RM3.10
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Rallied strongly from RM2.43
to RM2.93 following the inclusion in SC’s list of Syariah-compliant stocks.
The stock has since retraced 6.5% from the high and is now trading at the
38.2% retracement support level of its recent rally, a suitable level to
resume accumulation of the stock that is showing clear signs of starting a
new bull trend. The positive weekly technical indicators confirm the bullish
scenario for the next 3-6 months. The fundamentals are also improving with
its main division, the Proton-led auto division gaining market share with
their new models, Suprima S & Saga SV, due to their competitive pricing
vis-à-vis Perodua cars, made possible by cost savings from parts
standardisation & streamlining of its supply chain. This is part of the
Proton’s 5-year business plan which targets to sell 500,000 cars per annum,
including 150,000 units for exports, by 2017/18. Proton also plans to produce
a global small car by next year which would help them to further gain back
the market share lost to Perodua. Recently, it was reported that Proton will
deliver 3,000 units of the new Perdana replacement model to replace the
government’s existing fleet. DRB said that they have also received requests
from state governments and statutory bodies to make the switch as well. There
were recent news flow of impending introduction of mandatory inspection of
passenger vehicles. DRB’s subsidiary, Puspakom, which has the sole concession
to undertake computerised inspections for all commercial vehicles until
31/8/2024 will likely be the main beneficiary from this move. The recent
removal of big cap institutional stocks like Bumi Armada, AirAsia, YTL Power,
SPSetia, Tan Chong & MRCB from the Syariah-compliant list will force
Syariah-compliant funds to look for alternative stocks to reallocate their
funds and DRB will likely be one of the four bigger cap additions that they
can switch into. Buy
(PT)
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TAANN (5012)
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17/12/2013
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RM4.14
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BUY
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RM4.56
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Taann (RM4.14) – the vast
improvements in Q3 results versus the 1H13 results illustrated the company’s
successful effort at cost management during difficult times of low CPO prices
and weak plywood prices. Now that the prices of both CPO & timber have
improved, Taann is expected to reap the fruits of its labour with significant
rise in margins from both the plantation & timber divisions. In addition,
the plantation’s margin will further improve from lower fertiliser cost
following the break-up of the potash cartel in mid-2013. Taann is also
benefitting from improving FFB production due to the relatively young age
profile of its palm. This is particularly advantageous when the big planters
in Malaysia & Indonesia are seeing lower production from tree stress
& dry weather of the last 2 years. The timber division is also seeing
volume growth from global heightening economic activities, especially in
Japan. In view of such positive parameters, it is not surprising that Taann’s
2 years compounded annual earnings growth is 51.5%, yet it trades at below
market FY14 & FY15 PER of 13.4x & 10.9x. Buy
(PT)
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Calls for DEC week 2/week 3
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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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KULIM (2003)
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10/12/2013
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RM3.58
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Trading BUY
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RM4.00
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RM3.57
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-0.2%
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SEALINK (5145)
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10/12/2013
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RM0.40
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Trading BUY
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RM0.50
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RM0.39
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-2.5%
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SUNWAY (5211)
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11/12/2013
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RM2.68
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ACCUMULATE
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RM3.20
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RM2.66
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-0.8%
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ENGTEX (5056)
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11/12/2013
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RM1.68
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Trading BUY
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RM2.00
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RM1.68
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0.0%
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AIRASIA (5099)
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12/12/2013
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RM2.36
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BUY on weakness
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RM3.24
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RM2.34
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-0.9%
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MAYBANK (1155)
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12/12/2013
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RM10.08
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ACCUMULATE
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RM11.33
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RM9.98
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-1.0%
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GAMUDA (5398)
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13/12/2013
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RM4.54
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BUY
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RM5.00
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RM4.51
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-0.7%
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YTL (4677)
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13/12/2013
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RM1.62
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Trading BUY
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RM1.80
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RM1.63
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+0.6%
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MRCB (1651)
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16/12/2013
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RM1.24
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Trading BUY
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RM1.40
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RM1.25
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+0.8%
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UEMS (5148)
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16/12/2013
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RM2.30
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BUY
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RM2.60
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RM2.30
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0.0%
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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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