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FLOWS
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Thursday, 24 April, 2014
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BUY
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ASTRO,
DIGI, TENAGA
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SELL
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CIMB, YTL, MAYBANK
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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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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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Stock has been consolidating for more than 2 months in a
trading band of RM2.40 to RM2.57, and the last couple of days showed signs of
breaking out with volume confirmation. With the other o&g fabricators
& contractors outperforming, it is an appropriate timing to buy 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 11.2x
& 10.5x respectively. Buy
(LJN/PT)
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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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Since it hit its high in Feb’14, Perdana has been trading
around the RM1.90 level . As seen from the recent results, once the company
has covered its fixed overheads with the achieving of that critical mass, a
large portion of the gains in revenue from higher utilization & charter
rates go straight to the bottom line. We expect this phenomenon to continue
into this FY results as the management has guided better utilization rates
couple with the new contracts that were secured at higher charter rates.
Multiples expansion may not be discounted as Perdana is seeing higher
visibility of earnings with 65% of the working vessels on long-term charters.
Perdana has also indicated that their emphasis is now on EOR-related jobs where
Petronas & its PSC partners are budgeting to spend RM30b over the next 30
years and the expected better stability in brownfield projects. It is
currently bidding to supply vessel to a Shell EOR job (St Joseph’s) where
award is expected by April-May’14. Perdana is also attractive on a valuation
basis with FY14 & FY15 PER of 14.9x & 12.7x versus peers average of
18.6x & 12.7x.
(LJN/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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MAHSING (8583)
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17/4/2014
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RM2.29
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Accumulate
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RM2.69
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RM2.32
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+1.3%
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TIMECOM (5031)
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17/4/2014
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RM4.65
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SELL
into Strength
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RM4.20
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RM4.37
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-6.1%
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MRCB (1651)
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18/4/2014
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RM1.62
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BUY
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RM2.20
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RM1.63
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+0.6%
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SPSETIA (8664)
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18/4/2014
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RM2.92
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Trading BUY
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RM3.20
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RM2.93
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+0.4%
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MTDACPI (5924)
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21/4/2014
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RM0.505
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Trading BUY
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RM0.80
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RM0.485
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-4.0%
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FABER (1368)
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21/4/2014
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RM2.70
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BUY
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RM3.13
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RM3.10
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+14.8%
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UMWOG(5243)
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22/4/2014
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RM3.90
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ACCUMULATE
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RM4.40
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RM4.06
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+4.1%
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YEELEE(5584)
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22/4/2014
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RM1.90
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SELL
into Strength
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-
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RM1.90
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+0.0%
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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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RM2.32
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+0.8%
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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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RM1.94
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+5.4%
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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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