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FLOWS
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Wednesday, 30 April, 2014
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BUY
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ASTRO,
GAMUDA, AXIATA
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SELL
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TENAGA, BAT, PCHEM
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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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MISC (3816)
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30/4/2014
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RM6.39
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BUY
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RM7.10
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Stock has retraced 10% in a
month from its recent high of RM7.10 and close at its 26.4% retracement of
its rally from a low of RM4.46 in August’13. Recent results provided a
glimpse of potential MISC performance ahead especially its offshore division
with the maiden contribution from its 50% stake in Gemusut-Kakap floating
production system and the forthcoming Cendor FPSO from FY14. In addition, its
tank terminal division is expected to see higher earnings as the subsequent
phases in Tanjong Bin come into operation. The chemical segment has also
turnaround from higher freight rates & lower operating costs, while the
petroleum division saw lower losses from downsizing of vessel fleet &
improvement in rates. A further improvement in freight rates is expected in
FY14 with a Bloomberg survey of analysts forecasting the crude tanker rates
for VLCC, Suezmax & Aframax increasing 27%, 8% & 7% respectively in
2014 versus FY13. The heavy engineering division which has been a drag on earnings
will see a turnaround in FY14 with the Malikai tension-leg platform project
& the Block SK316 central processing platform job contributing to the
bottomline. With all segments showing signs of improvement coupled with a
decent valuation of 1.1x p/bk versus historical average of 1.42x, it is
opportunity to accumulate MISC in the current correction.
(PT)
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SEALINK (5145)
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30/4/2014
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RM0.465
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BUY
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RM0.57
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Counter broke out from a
double bottom formation and a downtrend from early 2011 on huge volume to a
high of RM0.53. The recent correction of the ACE-listed counters has also
affected Sealink with a retracement of 61.8% of its recent rally from RM0.425
to RM0.53, an attractive technical level for re-entry of the stock. Sealink’s
main earnings come from the O&G industry as its chartering of marine
support vessels business is predominantly to the offshore O&G players. It
has a young and diverse fleet of 40 vessels that cater to a wide base of
reputable clients. It is not surprising that this division has shown
significant year-on-year improvement in recent quarterly results with both
higher utilization & charter rates registered in the industry. This
division has also been boosted by the delivery of 2 state-of-the-art
diesel-powered hybrid anchor handlers with DP-2 positioning which will
contribute handsomely to Q4’13 & FY14 profits. These 2 AHTS are 8,000HP
vessels but with their hybrid capabilities, they have the pulling capacity of
an equivalent 12,000HP AHT with significant cost-saving advantage that will
stand them in good stead in competing for contracts. The shipbuilding &
repair division, which has been suffering losses the last 2 years, is also
showing signs of improvement with the announcement of contracts secured for
the disposal of 3 vessels in Dec’13 and expectations of further orders from
the buoyant local O&G sector. Sealink’s valuation is highly attractive
with a p/bk of 0.52x & a forward FY14 PER of 6.6x. Buy
(PT)
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Calls for APRIL Week 3/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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AIRASIA (5099)
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23/4/2014
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RM2.30
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BUY
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RM3.10
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RM2.25
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-2.2%
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GADANG (9261)
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23/4/2014
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RM1.84
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Take Profit
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RM1.43 BB
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RM1.74
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-5.5%
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KKB (9466)
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24/4/2014
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RM2.58
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BUY
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RM2.80
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RM2.51
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+2.8%
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PERDANA (7108)
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24/4/2014
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RM1.91
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BUY
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RM2.30
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RM1.84
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-3.7%
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MAYBANK (1155)
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25/4/2014
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RM9.96
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Switch > RHBCAP
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-
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RM9.72
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-2.5%
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PERISAI (0047)
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25/4/2014
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RM1.63
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BUY
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RM1.88
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RM1.58
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-3.1%
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IOIGP (5249)
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28/4/2014
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RM2.69
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BUY
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RM3.40
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RM2.69
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0.0%
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IGB (1597)
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28/4/2014
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RM2.75
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ACCUMULATE
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RM3.20
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RM2.75
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0.0%
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GAMUDA (5398)
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29/4/2014
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RM4.55
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BUY
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RM5.45
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RM4.56
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+0.2%
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SUNWAY (5211)
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29/4/2014
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RM3.15
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BUY
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RM3.50
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RM3.10
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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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