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FLOWS
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Monday, 21 July, 2014
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BUY
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IOICORP,
SKPETRO, GENM
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SELL
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DIGI, TM, 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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PANTECH (5125)
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21/7/2014
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RM1.14
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ACCUMULATE
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RM1.30
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Group is well-positioned one-stop providers of pipes,
fittings and flow control solutions which targets the higher-margin O&G
sector. Pantech is expected to have positive newsflows over the next few
months as it is a likely beneficiary of the USD27b Refinery And Petrochemical
Integrated Development (RAPID). Despite its given potential, the stock is
still undervalued compared to its peers & the broader market. It trades
at PER of 11.2x (FY2/15) & 10.1x (FY2/16) versus its other small &
mid-cap peers average PER of 15.8x & 12.2x. Pantech also provides an
above-market dividend yield of 4.2% & 4.5% for the next 2 financial
years. Its stainless steel plant has shifted production from stainless steel
pipes to fittings which have higher margins. It has managed to penetrate more
export markets due to UK-based Nautic Steel products which carried higher
margins and are approved by many of the oil majors. It is also raising its
production capacity at its carbon steel plant (currently running at full
capacity) by 13.5% this year. Last year, Pantech acquired a second plot of
land near Nautic’s existing factory and invested in new equipment to expand
product range. Utilisation stands at 75% following the capacity increase
which is supportive of growth over the next 2 years. Accumulate
(LJN/PT)
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L&G (3174)
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21/7/2014
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RM0.565
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ACCUMULATE
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RM0.675
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Stock rallied >10% following the announcement of its
strong FY3/14 results, the highest since 1996, to a high of RM0.60. The
current weakness is an opportunity to accumulate the stock as management is
confident of sustaining this performance with the current projects and the
new launches in the pipeline. L&G will replicate the success of its first
high-rise project, The Elements@Ampang, in another high-rise development on
the adjacent 5.7-acre land in a JV with its major shareholder, Malaysia Land
Properties Sdn Bhd (Mayland). This project has an estimated GDV of RM800m.
L&G has started developing the remaining 43 acres left in their renowned
Bandar Sri Damansara township development. The first phase of 17 acres,
launched as the Damansara Foresta, is a high-end high-rise residential
project which will maintain the green features of it surrounding area. The
second phase, on a 7-acre parcel, is expected to be launched by early next
year consists of 456 units of condominium with similar concept to its first
phase. These 2 phases have an estimated GDV of RM600m. L&G also has a
200-acre parcel in the Tuanku Jaffar Golf & Country Resort in Negeri
Sembilan and 2,500 acres in Lembah Beringin, Selangor which may be developed
into an integrated township in the future. L&G is currently traded at a
PER of 6.3x for FY3/15. Accumulate
(LJN/PT)
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Calls for JULY 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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IHH (5225)
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11/7/2014
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RM4.70
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SELL
into strength
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RM3.80
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RM4.77
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+1.4%
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SUPERMX (7106)
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11/7/2014
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RM2.15
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ACCUMULATE
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RM2.60
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RM2.15
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0.0%
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GTRONIC (7022)
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14/7/2014
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RM4.33
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ACCUMULATE
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RM5.00
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RM4.24
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-2.1%
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LONBISC (7126)
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14/7/2014
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RM0.885
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Trading BUY
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RM1.05
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RM0.875
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-0.6%
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ARMADA (5210)
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16/7/2014
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RM3.24
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ACCUMULATE
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RM3.98
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RM3.26
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+0.6%
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DAYA (0091)
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16/7/2014
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RM0.28
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Trading BUY
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RM0.35
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RM0.295
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+5.3%
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ICON (5255)
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17/7/2014
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RM1.85
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BUY
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RM2.20
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RM1.85
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0.0%
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NOTION (0083)
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17/7/2014
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RM0.65
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Trading BUY
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RM0.72
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RM0.655
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+0.7%
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PHARMA (7081)
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18/7/2014
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RM4.83
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ACCUMULATE
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RM5.40
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RM4.82
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0.0%
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YTL (4677)
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18/7/2014
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RM1.59
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BUY
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RM1.93
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RM1.56
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-1.9%
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Performance
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Positive
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Negative
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Neutral
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