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FLOWS
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Thursday, 12 June, 2014
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BUY
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TENAGA,
SKPETRO, SIME
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SELL
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YTL, DIGI, ASTRO
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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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PENERGY (5133)
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12/6/2014
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RM3.03
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SELL into strength
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-
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The
share price has had a good run recently, adding c16% over the past 2 weeks.
This was probably related to higher expectations from the development of
Kapal oilfield under the Kapal-Banang-Meranti (KBM) marginal field, which
management revealed was progressing well. We see this price spike as a
selling opportunity. Group’s recent Q1 results were much below expectations,
although it’s hook up construction & commissioning and topside major
maintenance ( HUCC/TMM) contract by Petronas have just started to pick up.
The marine offshore support services segment registered losses, due to
additional costs incurred in modifying vessels. Also notable is the group’s
uneven track record in terms of project execution and profitability. Group
now trades at 27x FY14 EPS, a premium to other comparable small cap O&G
companies of between 10-12x. RSI at 81. We suggest investors take profit and
accumulate again at lower levels when group starts to deliver stronger &
sustainable earnings; Sell into strength.
(AK)
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WCT (9679)
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12/6/2014
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RM2.23
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ACCUMULATE
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RM2.80
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Share price has been subdued over the past 6
months, as the group is viewed as not being a good proxy to the buoyant
construction sector ( yet to secure any work packages fron the Klang Valley
MRT project ) and that it’s property business is facing headwind on the back
of the various sector cooling measures. Lack of contract wins since
1H2013 has kept sentiment & stock valuation low. We believe the negatives
are already priced in and that group’s prospects should improve in 2H14.
Construction margin has improved from 1% in 4Q13 to 10% in 1Q14. We expect
WCT to step up OB replenishment initiatives in the coming months. The RM5b
worth of contracts under WCE ( awarded to IJM ) could be a catalyst, as it
had undertaken sub contracting works for IJM in the Kajang-Seremban Highway
(LEKAS). Other prospective jobs include Tun Razak Exchange earthworks (
RM200-300m), RAPID Civil works & infra projects in Qatar. The opening of
Gateway@KLIA2 removes a key overhang for the group’s growing property
portfolio and another 2 malls under the Paradigm brand are in the pipeline.
In property development, group is again aiming for new sales of RM1.2b in
FY14. Forward valuation appears undemanding at 12x FY15, while the balance
sheet remains healthy with FY14 net gearing at 36% ; Accumulate, TP
RM2.80 ( 15x FY15 EPS).
(AK)
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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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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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RM3.02
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+0.6%
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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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RM0.0.95
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+5.5%
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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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RM0.89
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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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RM1.65
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+1.2%
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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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RM2.20
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-5.6%
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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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RM4.17
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+3.4%
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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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RM7.68
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+0.9%
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Performance
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Positive
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Negative
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Neutral
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