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FLOWS
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Wednesday, 4 December, 2013
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BUY
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MISC,
FGV, PCHEM
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SELL
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AIRASIA, GENM,
TENAGA
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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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SENDAI (5205)
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4/12/2013
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RM1.16
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ACCUMULATE
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RM1.60
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The
share price has fallen c17% over the last 3 weeks, partly due to missed
earnings expectations in Q3. The poor result was due to group’s inability to
recognize profits from certain projects in a timely manner (in view of
un-finalized variation order claims of c RM35m). Co had incurred incremental
costs for the works but no additional revenue was recognized as the VO claims
have not been approved. We see this share price pullback an excellent
opportunity to accumulate the stock, as the timing issue should not be read
as a sign of deterioration in its business model of fundamentals. We still
like the group for its position as a truly global construction player, its
good proxy to oil wealth (tenders for some of the stadiums for World up 2022
in Qatar likely to be out next year, Dubai to host 2020 World Expo) and its
up and coming O&G play (via Technics & Sumatech Engineering &
Construction). Valuation looks attractive, trading at 8.9x for FY14 ( vs
forward PE of 10-16x for the construction sector), RSI at 20 – Accumulate (
TP RM 1.60, 12x FY14 EPS).
(AK)
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TROP (5401)
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4/12/2013
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RM1.36
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ACCUMULATE
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RM1.70
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The weakness of the share price over the past 3
months ( -20% ) was largely due to general concerns over the property sector
and also specifically the high gearing of the group. We believe the sentiments
on this stock is starting to turn around. Co’s recent Q3 results were in
line. Nonetheless, future growth prospects remain strong, underpinned by its
total new sales of RM1.8b, strong unbilled sales of RM2.2b and group expects
to launch about RM1.8b worth of projects in 4Q13, bringing FY13 launches to
RM3.4b. We also like the group as it enters the second phase of asset
management and adopts a more prudent strategy ( plans to suspend land
purchases) which not only addresses concerns of its high leverage, but also
allows it to have a more generous dividend policy. We anticipate a period of
high cash flow going forward (from non land bank purchases & significant
asset monetisation activities – degearing initiatives, en-bloc sales &
securing minority JV partners), possibly lowering its debt ratio from 0.7x to
0.5x. Group is trading at a steep 57% discount to its RNAV/share of RM3.16,
we see this overly pessimistic & has not priced in the asset
monetisation, upside to dividends & strong locked in sales; Accumulate (
TP RM 1.70, c45% disc to RNAV).
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Calls for NOV Week 4 / DEC 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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BENALEC (5190)
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27/11/2013
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RM1.01
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Trading BUY
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RM1.23
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RM0.965
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-4.5%
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SURIA (6521)
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27/11/2013
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RM2.41
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ACCUMULATE
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RM3.44
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RM2.58
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+7.0%
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MAHSING (8583)
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28/11/2013
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RM2.16
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Trading BUY
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RM2.60
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RM2.21
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+2.3%
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GAMUDA (5398)
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28/11/2013
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RM4.76
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BUY on weakness
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RM5.20
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RM4.65
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-2.4%
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PANTECH (5125)
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29/11/2013
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RM0.995
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ACCUMULATE
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RM1.15
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RM0.97
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-2.6%
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MHB (5186)
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29/11/2013
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RM3.74
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ACCUMULATE
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RM5.20
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RM3.78
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+1.0%
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PMETAL (8869)
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2/12/2013
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RM2.36
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BUY
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RM3.12
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RM2.31
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-2.2%
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PCHEM (5183)
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2/12/2013
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RM6.75
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Trading BUY
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RM7.30
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RM6.74
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-0.2%
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SYSCORP (5173)
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3/12/2013
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RM0.435
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BUY
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RM0.65
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RM0.445
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-2.2%
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CMSB (2852)
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3/12/2013
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RM6.09
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Take Profit
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-
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RM5.90
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-3.2%
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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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