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FLOWS
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Monday, January 27, 2014
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BUY
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AXIATA,
CIMB, IJM
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SELL
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TENAGA, ALAM, 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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CIMB (1023)
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27/1/2014
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RM6.90
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Buy on Weakness
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RM7.40
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traded down by nearly 7% to a
low of RM6.8 from RM7.30 (the closing price prior to the private placement of
the new 500m shares at RM7.10) before rebounding to RM6.90 on Friday. All the
technical indicators are in oversold territory - RSI reading of 24%. It is trading within
the congestion support band of RM6.75 to RM7.02 which held support in Jan-Mar
2013. While the private placement exercise is dilutive to earnings in the
immediate term, we are of the opinion that the benefits of this pre-emptive
move which boosts CIMB Tier 1 common equity from 8.2% to 9.7%, far outweighs
the short term dilution. This is especialy so amid fears of Fed tapering of
its QE programme causing sudden flights of funds/capital from the emerging
markets with adverse results on their currencies and raising their cost of
funds and equity premium.The timing & success of the placement has
already been vindicated with the events that have recently unfolded last week
such as the >12% devaluation of the Argentinian peso and the contagion it
had on the currencies of the other Latin American countries to Turkey,
Russia, Ukraine, South Africa and India, coupled with soaring bond yields of
emerging market and peripheral European countries’ debts. Investors may have
shunned the capital raising exercise if it is carried out today or demanded a
greater discount to compensate for the increased emerging market equity
premium from the fears of contagion. Despite its well-regarded management,
its leading investment banking unit, strong shareholder backing and a key
beneficiary of the ongoing rollout of ETP projects, CIMB trades at a
relatively cheaper valuation for FY14 PER & p/bk of 11.2x & 1.5x
versus its big cap peers average of 12.2x & 1.9x. BOW in view of the
current uncertainty in global markets. TP: RM7.40 (PT)
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IOIPG (5249)
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27/1/2014
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RM2.85
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ACCUMULATE
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RM3.30
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start accumulation
of IOIPG as it has attractive fundamentals with the largest landbank of all
listed developers, and is second largest by market cap. It is estimated to
have a total GDV of RM100b which is at par to SPSetia and 28% higher than
UEMS. This implies a GDV/market cap ratio of 12.6x, just trailing SPSetia's
14.3x but higher than its big cap peers average of 9.3x. Almost all of
IOIPG's local projects are township developments which are more resilient and
less sensitive to recent regulatory changes. These townships are mainly
focused on landed residentials with strong accessibility to rail systems and
highways, and mainly owner-occupied in the affordable & upgraders market.
It has comparative advantage over its peers in IOI Corp which has 163k of oil
palm land in Malaysia. IOIPG has sourced landbank from IOI in the past and
due to the cheap land cost, IOIPG's margin is 50-60% compared to its peers
25-30%. It also has almost RM2b worth of property investment assets currently
and 3 more in the pipeline, i.e. IOI City Mall, South Beach & Xiamen
malls & offices, which provided recurring income and contributed 7% of
FY13 group’s revenue, will likely be monetised in 3-5 years. Its overseas
projects provide IOIPG the opportunity to diversify and flexibility to
response to changes in market conditions. Yet it trades at attractive
valuations of forward FY6/15 PER & p/bk of 10.2x & 0.78x
respectively. Accumulate with TP: RM3.30 (PT)
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Calls for JAN week 2/Week 3 2014
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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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PUNCAK (6807)
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20/1/2014
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RM3.10
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ACCUMULATE
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RM3.80
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RM2.95
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-4.8%
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FAVCO (7229)
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20/1/2014
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RM3.25
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ACCUMULATE
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RM3.75
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RM3.03
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-6.7%
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BSTEAD (2771)
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21/1/2014
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RM5.34
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ACCUMULATE
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RM6.00
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RM5.29
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-0.9%
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SIME (4197)
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21/1/2014
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RM9.12
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ACCUMULATE
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RM10.00
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RM9.02
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-1.0%
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DIALOG (7277)
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22/1/2014
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RM3.32
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ACCUMULATE
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RM3.60
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RM3.25
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-2.1%
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TIMECOM(5031)
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22/1/2014
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RM3.56
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BUY
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RM3.90
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RM3.51
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-1.4%
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BARAKAH (7251)
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23/1/2014
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RM1.70
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Trading SELL
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RM1.47
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RM1.73
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+1.7%
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MUDAJYA (5085)
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23/1/2014
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RM2.74
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Trading BUY
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RM3.34
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RM2.67
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-2.5%
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AIRPORT (5014)
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24/1/2014
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RM8.90
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ACCUMULATE
on weakness
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RM10.00
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RM8.74
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-1.8%
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PERDANA (7108)
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24/1/2014
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RM1.69
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ACCUMULATE
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RM2.00
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RM1.65
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-2.4%
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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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