|
FLOWS
|
Wednesday, 16 July, 2014
|
|||||||||||||
|
BUY
|
SIME,
MAYBANK, TENAGA
|
|||||||||||||
|
SELL
|
MRCB, CIMB, MAXIS
|
|||||||||||||
|
STOCK ALERT
|
||||||||||||||
|
STOCK NAME
|
DATE
|
PRICE
|
BUY/SELL
|
TARGET PRICE
|
||||||||||
|
ARMADA (5210)
|
16/7/2014
|
RM3.24
|
ACCUMULATE
|
RM3.98
|
||||||||||
|
Armada (RM3.24) – last week low of RM3.15 is very
near to the IPO price of RM3.03 and Armada has never traded at such
attractive valuations (PER of 15.7x & 13.1x for FY15 & FY16 versus
historical mean of 28x) since its IPO in July 2011. Management has dismissed
rumours of problems in its African operations and clarified that they have
99.9% uptime in their operations there. They are the best in class in terms
of uptime & margins in the O&G industry in Africa. For investors
who are concerned with the dip in recent results,
management has explained that this was due to a change in
accounting treatment for 2 of its largest FPSO to finance leases which have
minimal recognition of revenue & profit during the conversion
period and recognition of revenue & profit tend to be back-end
loaded. But this change in accounting policy has no impact on the company's
project cash flow & IRR. The 1Q2014 results were also affected by the
winter season in the Caspian Sea which affected their operations but have
since resume to normal operations subsequently. In fact, Armada looks set for
a sharp improvement in bottomline for FY15 with 2014 being such a busy year
compared to 2013. After Armada Claire FPSO set sail in Feb’14, the company is
working on the conversion works of Armada C7 FPSO (target completion by 3Q14)
and Kraken FPSO (target completion by 1H16). Concurrently, Armada is actively
bidding for 10 FPSO prospects worldwide. Notable mentions are Eni’s East Hub
project off Angola (USD1.5b) and Husky’s Madura development off Indonesia
(USD1.2b) where Armada is tipped as the frontrunner. The company's current
order book is a strong RM32b which is > 15x FY13 revenue. Armada’s recent
RM1.5b Sukuk debt raising exercise will reduce its conventional debt to about
25% of its total assets, well below the Syariah threshold of 33%, which indicate
management’s initial deliberate attempt to get back to the Syariah
list. Accumulate
(LJN/PT)
 |
||||||||||||||
|
DAYA (0091)
|
16/7/2014
|
RM0.28
|
Trading BUY
|
RM0.35
|
||||||||||
|
Daya (RM0.28) – stock has corrected >38% since it peaked
in 1Q2014 due to lower-than-expected 1QFY14 results and management
changes especially in the O&G division. This has brought the
price to an attractive valuation of PER 9.0x & 7.6x for FY14
& FY15 respectively. This is significantly lower than the average valuation
of small & mid-caps in the O&G sector of 17.3x for FY14, 12.4x for
FY15, and Daya’s historical average PER of 21.4x. It has a record order
book of RM1.5bn that drives the company's 3-year EPS CAGR of 29%. Management
also guided that they have secured the charter of SD3 which is currently
under construction and this vessel construction may be expedited in view of
the contract. Additional potential driver would be the successful acquisition
of 100% stake in SD1 & SD2 which the company has guided earlier.
Technically, Daya is oversold (RSI at 24%) and with the upcoming capital
exercise, the stock may trade upwards to at least the earlier placement price
level of RM0.345. Trading buy
(LJN/PT)
 |
||||||||||||||
|
|
||||||||||||||
|
Calls for JULY WEEK 2 2014
|
||||||||||||||
|
STOCK
|
Initiation Dates
|
Initiation price
|
BUY/SELL
|
TARGET PRICE
|
LAST PRICE
|
% Change
since Initiated
|
||||||||
|
ECONBHD (5253)
|
8/7/2014
|
RM0.765
|
BUY
|
RM1.00
|
RM0.73
|
-4.6%
|
||||||||
|
GUH (3247)
|
8/7/2014
|
RM1.39
|
BUY
|
RM1.55
|
RM1.37
|
-1.5%
|
||||||||
|
UCHITEC(7100)
|
9/7/2014
|
RM1.42
|
ACCUMULATE
|
RM1.78
|
RM1.42
|
0.0%
|
||||||||
|
MEDIA (4502)
|
9/7/2014
|
RM2.44
|
ACCUMULATE
|
RM2.90
|
RM2.30
|
-5.8%
|
||||||||
|
BARAKAH (7251)
|
10/7/2014
|
RM1.58
|
ACCUMULATE
|
RM1.80
|
RM1.58
|
0.0%
|
||||||||
|
GENTING (3182)
|
10/7/2014
|
RM9.80
|
ACCUMULATE
|
RM11.00
|
RM9.79
|
-0.2%
|
||||||||
|
IHH (5225)
|
11/7/2014
|
RM4.70
|
SELL
into strength
|
RM3.80
|
RM4.75
|
+1.0%
|
||||||||
|
SUPERMX (7106)
|
11/7/2014
|
RM2.15
|
ACCUMULATE
|
RM2.60
|
RM2.13
|
-1.0%
|
||||||||
|
GTRONIC (7022)
|
14/7/2014
|
RM4.33
|
ACCUMULATE
|
RM5.00
|
RM4.29
|
-1.0%
|
||||||||
|
LONBISC (7126)
|
14/7/2014
|
RM0.885
|
Trading BUY
|
RM1.05
|
RM0.885
|
0.0%
|
||||||||
|
Performance
|
|
|
Positive
|
|
|
Negative
|
|
|
Neutral
|
|
