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FLOWS
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Thursday, 27 March, 2014
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BUY
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SKPETRO,
UMW, DIGI
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SELL
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ASTRO, SIME, GAMUDA
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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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MHB (5186)
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27/3/2014
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RM3.72
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ACCUMULATE
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RM4.30
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Stock has led the broad market recently with a strong
bounce from its recent low of RM3.51 to a high of RM3.75 accompanied with
above average volume and subsequently consolidated in a flag pattern with the
daily macd firmly in the positive. While the weekly macd has just registered
a golden cross which bodes well for the stock in the medium term. This chart
is not typical of MHB’s in the past year due to its disappointing earnings,
cost overruns and delay in award of contracts. Hence, this could possibly
mean the fruition of a few potential catalysts like the winning of the
big jobs (worth US$1b) they have tendered like the Baronia, Sepat, Bergading,
Bokor & Dulang fields central processing platform (CPP) projects. As they
have completed a few major jobs towards the end of last year, the yard
utilisation has dropped to 50%, providing the capacity to bid for these huge
contracts. There is also the potential of a successful negotiation on
reimbursements of additional work done to complete the previous jobs where
the costs have been recognised but not the revenue. Accumulate
(LJN/PT)
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KKB (9466)
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27/3/2014
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RM2.47
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ACCUMULATE
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RM2.75
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Stock has been consolidating for more than 2 months in a
trading band of RM2.40 to RM2.60, and recently with the o&g fabricators
& contractors performing well, it is an appropriate level to start
accumulation of KKB. KKB is one of the prime beneficiaries of the
Sarawak Corridor of Renewable Energy (SCORE), where it has a proven track
record of having successfully completed many fast-tracked SCORE-related
projects. This is seen recently when they won a larger-than-expected RM227m
pipe supply order. The company is bidding for RM430m worth of jobs and has a
historical contract win rate of 30%. A bigger portion of the current tenders
are said to be fabrication jobs which carry higher profit margin. In
addition, KKB is expected to clinch RM100m – RM150m worth of O&G-related
contracts in FY14 after its 43% associate, OceanMight SB, became a licensed
Petronas supplier. Upstream reported that KKB is part of a consortium
(together with Hyundai Heavy Industries & Norway’s Aker Solutions)
pre-qualified for the development of the offshore facilities for the
Bergading field under the first phase of the North Malay Basin field. This
turnkey contract has a potentially value of USD1bil. KKB trades at FY14 &
FY15 PER of 10.7x & 10.1x respectively. Accumulate
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Calls for MARCH Week 4 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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MITRA (9571)
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20/3/2014
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RM0.55
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ACCUMULATE
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RM0.70
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RM0.585
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+6.3%
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CMMT (5180)
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20/3/2014
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RM1.50
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TRIM
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RM1.30
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RM1.45
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-3.4%
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IJM (3336)
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21/3/2014
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RM5.90
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ACCUMULATE
on weakness
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RM6.75
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RM6.11
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+3.5%
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UEMS (5148)
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21/3/2014
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RM2.15
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ACCUMULATE
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RM2.60
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RM2.18
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+1.3%
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GENTING (3182)
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24/3/2014
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RM9.60
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ACCUMULATE
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RM10.50
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RM9.67
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+0.7%
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KPS (5843)
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24/3/2014
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RM1.63
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ACCUMULATE
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RM2.00
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RM1.65
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+1.2%
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BENALEC (5190)
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25/3/2014
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RM0.925
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ACCUMULATE
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RM1.15
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RM0.92
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-0.6%
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WASEONG(5142)
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25/3/2014
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RM1.88
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ACCUMULATE
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RM2.00
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RM1.88
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0.0%
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HOHUP (5169)
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26/3/2014
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RM1.49
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ACCUMULATE
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RM2.00
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RM1.51
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+1.3%
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PERDANA (7108)
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26/3/2014
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RM1.89
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ACCUMULATE
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RM2.50
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RM1.86
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+1.6%
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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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