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FLOWS
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Thursday, 22 May, 2014
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BUY
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AIRASIA,
TENAGA, IOICORP
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SELL
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MRCB, 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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KPS (5843)
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22/5/2014
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RM1.52
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Trading Buy
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RM2.50
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has
corrected sharply (-32%) from its high of RM2.41 at the end of 2013 to a low
of RM1.40 earlier this month. On its 3-year weekly chart, it is a retracement
of more than 50% retracement from the low (RM0.59) in September 2011 to the
high (RM2.41) in November 2013. It then rebounded from the RM1.40 low to a
high of RM1.63 on news of a potential resolution in the impasse between the
various water sector players and the Selangor state government. It was
reported that the Economic Council has stepped in to resolve the
long-standing dispute. As KPS has accepted the Selangor state government
offer within the offer period, the company is guaranteed the minimum
consideration for its sale of its water assets to the state in the event of a
compulsory takeover under WASIA or even if it requires arbitration. Based on
the last reported balance sheet of the company at y/e 31/12/13, the NAV of
the company was RM2.19/share, i.e. KPS is currently trading at a 31% discount
to its NAV even without revaluing its other property-related assets which
have appreciated in value sharply the last couple of years. If KPS is able to
obtain the book value for SPLASH, the incremental improvement in NAV is
RM1.37/share and this will resolve the take-over of the Selangor assets
impasse as per SPLASH's chairman. Trading buy TP: RM2.50 (PT)
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DRBHCOM (1619)
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22/5/2014
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RM2.42
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Accumulate
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RM3.00
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is currently sitting at the support
level for the past 6 months, a low risk level for entry of the stock
especially with the recent newsflows of action been taken to revitalize
Proton with the revamp in management & the appointment of new CEOs in
Proton & Lotus. The appointment of Tun Dr Mahathir as the chairman of
Proton & Lotus bodes well for Proton, Lotus & DRB in view of his
influence over government policies and his statesmanship that facilitates the
opening of overseas markets. The fundamentals are improving with its main
division, the Proton-led auto division gaining market share with their new
models, Suprima S & Saga SV, due to their competitive pricing from parts
standardisation & streamlining of supply chain cost savings. It is slated
to introduce the planned global small car by the middle of this year, a
hybrid model by year-end and an electric car by the end of next year. This is
part of the Proton’s 5-year business plan which targets to sell 500,000 cars
per annum, including 150,000 units for exports, by 2017/18. It was also reported that Proton will
deliver 3,000 units of the new Perdana replacement model to replace the
government’s existing fleet. DRB said that they have also received requests
from state governments and statutory bodies to make the switch as well. There
were recent newsflow of impending introduction of mandatory inspection of
passenger vehicles. DRB’s subsidiary, Puspakom, which has the sole concession
to undertake computerised inspections for all commercial vehicles until
31/8/2024 will likely be the main beneficiary from this move. Deftech, the
military equipment subsidiary, is scheduled to deliver 12 units of its
armoured-wheeled vehicles to the Malaysian military by year-end which will
the boost profit contribution from the defense division. This is part of the
257 vehicles contract (valued RM7.55b) to be delivered by 2018. Accumulate (PT)
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Calls for MAY 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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OCK (0172)
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15/5/2014
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RM1.42
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TRADING BUY
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RM1.70
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RM1.46
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+0.7%
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TDM (2054)
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15/5/2014
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RM1.00
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TRADING BUY
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RM1.20
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RM0.985
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-1.5%
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SPSETIA (8664)
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16/5/2014
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RM2.97
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ACCUMULATE
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RM3.50
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RM2.93
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-1.3%
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PRESBHD (5204)
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16/5/2014
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RM1.91
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ACCUMULATE
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RM 2.20
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RM1.93
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+1.0%
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YINSON (7293)
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19/5/2014
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RM4.90
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BUY
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RM5.50
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RM4.79
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-2.2%
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IOICORP (1961)
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19/5/2014
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RM5.30
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TAKE PROFIT
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RM4.90
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RM5.20
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-1.9%
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COASTAL (5071)
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20/5/2014
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RM4.74
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ACCUMULATE
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RM5.94
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RM4.79
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+1.1%
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PERDANA (7108)
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20/5/2014
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RM1.73
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ACCUMULATE
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RM2.25
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RM1.77
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+2.3%
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SKPETRO (5218)
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21/5/2014
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RM4.24
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ACCUMULATE
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RM5.57
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RM4.24
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+0.0%
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AXIATA (6888)
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21/5/2014
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RM6.95
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Take Profit
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-
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RM6.93
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-0.3%
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Good Call
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Not Good Call
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