FLOWS
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Monday, 6 January 2014
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BUY
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MAYBANK,
SUPERM, UEMS
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SELL
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SKPETRO, AIRASIA,
CIMB
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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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6/1/2013
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RM1.03
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BUY
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RM1.29
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Most, if not all, of the institutional stocks that were
sold down towards the end of 2013 have rebounded quite sharply in the
first 2 days of trading of 2014 except for Sendai, which is still languishing
at the bottom in severe oversold territory (RSI = 20%). We are of the opinion
that this is a trading opportunity as the fundamentals are still intact with
potential sharp earnings reversal in the next 1-3 quarters. The company has
been prudent and has rightly recognised costs incurred on RM35m
of variation order(VO) claims which have not been finalised
with their clients. Management has guided that these VO will be settled and
recognised in the next few quarters. Sendai
has also incurred start-up costs as they diversified their expertise
into the lucrative Oil & Gas industry where they are targeting
high-margin structure steel jobs for petrochemical plants &
related fabrication works. The company has acquired an 80% stake in
Sumatec Rngineering & Construction (now called Eversendai Oil & Gas)
which is now applying for a renewal of the Petronas license
which has expired in 2013. While awaiting the renewal, Sendai has
tendered for RM2b worth of subcontracting jobs. In addition, Qatar, a key
market & where Sendai has comparative advantage from their years of
business experience there, is expected to call for tenders this year for
infrastructure works on projects for World Expo 2020 & World Cup 2022.
Sendai trades at an atrractive PER of 7.7x for FY14 & 6.7x for FY15. Buy
(PT)
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ALAM(5115)
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6/1/2013
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RM1.53
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BUY
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RM1.80
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Stock is currently trading near the lower end of its
trading range and with its technical indicators confirming a near-term
bottom. The weekly chart is also exhibiting an interesting ascending triangle
pattern dating back to July’13, with resistance at RM1.60. Fundamentally,
Alam is trading at an attractive PER of 11.3x for FY14 compared to the
average PER of its peers in the offshore marine Oil & Gas sector of
13.5x. It is also expected to report continued improvement in year-on-year
profit performance for the forth-coming Q4 results after 3 good quarters due
to both higher utilisation rates & daily charter rates. In addition, Alam
is tipped to be a front runner for RM1.2b – RM1.5b contracts for supply of
underwater services. These contracts were previously awarded to Offshoreworks
Group and is currently in financial distress. Alam has an outstanding order
book of RM2b which is equivalent to 4x of FY12 turnover. Buy
(PT)
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Calls for DEC week 3/ JAN week 1 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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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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RM2.72
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-0.8%
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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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RM4.18
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+0.9%
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DELEUM (5132)
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18/12/2013
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RM4.03
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BUY
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RM4.68
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RM4.34
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+7.6%
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E&O(3417)
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18/12/2013
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RM1.93
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Trading BUY
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RM2.76
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RM1.86
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-3.7%
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UNISEM (5005)
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19/12/2013
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RM0.89
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BUY
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RM1.30
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RM1.02
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+17.9%
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BURSA (1818)
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19/12/2013
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RM8.09
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BUY
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RM9.84
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RM8.13
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+0.4%
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TIMECOM (5031)
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2/1/2013
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RM3.55
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BUY
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RM4.00
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RM3.64
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+2.5%
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JTIASA (4383)
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2/1/2013
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RM2.04
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BUY
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RM2.30
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RM2.13
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+4.4%
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MUHIBBAH (5703)
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3/1/2013
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RM2.31
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BUY
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RM3.00
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RM2.30
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+0.5%
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GADANG (9261)
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3/1/2013
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RM1.02
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BUY
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RM1.60
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RM1.02
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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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