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FLOWS
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Wednesday, 11 June, 2014
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BUY
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SKPETRO,
DIGI, WCT
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SELL
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YTL, TENAGA, IOIP
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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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SKPETRO (5218)
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11/6/2014
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RM4.03
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ACCUMULATE
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RM4.60
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From the January'14 high of RM4.96, SKPetro
has corrected by 20% to the intraday low of RM3.97. It has also retraced
close to its key 61.8% retracement level of the last leg of its rally
from RM3.18 to RM4.96 which is technically an attractive level
for reentry of the stock. In addition, it is oversold with wide divergence on
the weekly & daily macd, coupled with a 29% RSI. The
current liquidation of SKPetro by foreign funds is an opportunity
to accumulate one of the world’s top 5 integrated O&S service
providers and the world’s largest tender rig operator (56% market share). It
is also backed by solid fundamentals with an order book of RM28b (3.4x FY14
revenue), trading at attractive FY1/15 & FY1/16 PERs of 16.4x & 14.3x
despite its 2-year EPS CAGR of 25% and recurring income from its
upstream assets which may accrue for up to 20 years with the recent gas
discoveries. Tender book is guided to be within RM25b. FY15 profit
performance will see a significant jump due to the consolidation of
Seadrill’s tender-rig earnings, the first contribution from the Brazilian
pipe-lay barge contracts and earnings from the Newfield's
upstream production. Accumulate
(PT)
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AIRPORT (5014)
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11/6/2014
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RM7.61
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BUY
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RM8.45
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The recent correction is due to concerns
over the potential bankruptcy of MAS which appear to be overblown as
even if there is bankruptcy, it would only be temporary to facilitate
restructuring as with the case of Japan Airlines a few years ago. Similarly,
the cutting of routes to restore profitability of MAS may not translate
to equal loss in passengers for Airport as the connecting routes could
still take place with code share arrangements within the One World
Alliance. In addition, there are alternative airlines that passengers
may fly on if MAS ceases certain routes, hence an expected neutral impact on
Airport. We view any price weakness as an opportunity to accumulate the
stock. Airport provides exposure to the fast-growing Asia's low-cost air
travel minus low-cost carriers' fuel cost & currency risk.
KLIA2, with a capacity of more than double of the previous LCCT is also a key
earnings driver especially when all the terminal’s retail outlets are opened.
Two near-term catalysts are the conclusion of negotiations for concession
extensions and the potential compensation of RM530m costs borne for
additional infrastructure on KLIA2 not under the original scope. Technically,
Airport has also retraced more than 50% of its run from November'12 low
of RM4.87 to its all-time high of RM9.65 in December'13.
Accumulate
(PT)
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Calls for JUNE WEEK 1/WEEK 2 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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PADINI (7052)
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4/6/2014
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RM1.94
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BUY on weakness
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RM2.20
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RM1.88(ex)
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-3.1%
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GADANG (9261)
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4/6/2014
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RM1.69
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Trading BUY
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RM2.20
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RM1.71
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+1.1%
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NCB (5509)
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5/6/2014
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RM3.00
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Trading BUY
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RM3.55
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RM2.99
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-0.4%
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IJM-WC (3336WC)
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5/6/2014
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RM2.79
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BUY
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RM3.30
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RM2.76
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-1.1%
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TALAMT (2259)
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6/6/2014
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RM0.09
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Trading BUY
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RM0.16
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RM0.10
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+11.1%
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SNTORIA (5213)
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6/6/2014
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RM0.895
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BUY
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RM1.20
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RM0.90
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+0.5%
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SUCCESS (7207)
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9/6/2014
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RM1.48
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BUY
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RM2.00
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RM1.47
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-0.7%
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WEIDA (7111)
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9/6/2014
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RM1.60
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ACCUMULATE
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RM2.00
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RM1.60
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0.0%
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YTL (4677)
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10/6/2014
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RM1.63
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BUY
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RM2.40
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RM1.67
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+2.4%
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SUPERMX(7106)
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10/6/2014
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RM2.33
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BUY
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RM2.90
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RM2.28
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-2.2%
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Performance
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Positive
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Negative
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Neutral
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