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FLOWS
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Tuesday, 22 July, 2014
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BUY
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PCHEM,
SPSETIA, TMAKMUR
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SELL
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DIGI, SKPETRO, CIMB
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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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POS (4634)
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22/7/2014
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RM5.33
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TRIM
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-
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The
share price has climbed c21% over the past 2 months, following the stronger
than expected Q4FY14 results. Results suggested investments that were made in
key growth segments were yielding positive results & that fundamentals
were in tact. However, with the price ascend, the stock is now trading at
c16x FY15, which is above its 5-year historical mean of 15x. We reckon there
is now limited upside and is close to fair value. Although the courier
segment will continue to be the key growth driver, it may be negated by
rising operational expenses, especially transportation costs & staff
costs in the face of subsidy cuts and other fiscal measures. Despite the cash
pile of RM439m, it is also unlikely to expect a significant increase in
dividend payout, due to cash requirements for capex of RM150-200m pa and
disbursement requirements at the Ar-Rahnu outlets. Although Pos has achieved
its target of 100 outlets for its Ar-Rahnu services, the business has yet to
be profitable given the average age of its outlets is only about 8 months
old. It could take up to 18 months to break even ; TRIM
(AK)
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PERISAI (0047)
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22/7/2014
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RM1.50
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ACCUMULATE
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RM1.88
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We
consider the current share price weakness a good opportunity to buy. Price
weakness was largely attributable to its 1Q net loss of RM3m. This was
nonetheless expected, given the absence of contributions from the MOPU
Rubicon & the derrick pipe lay barge E3 in the period. Earnings are
expected to catch up significantly in 2H as its first jack up rig has already
secured a contract. Group also guided it is still bidding for domestic &
international projects for both the E3 and MOPU and is hopeful to win
contracts over the next 6 months. We are also optimistic of Perisai’s
upcoming 2 new rigs due for delivery between 2Q15-3Q16 as they may easily
secure new contracts on the back of import substitution and limited supply of
locally owned rigs ( note there are 5 rigs expiring with only 6 new Malaysian
owned rigs due for delivery in that period). Trading at just 11.6x FY15 PE, a
steep 20% discount to other small/mid cap O&G stocks of c14X with a
projected robust 3-year EPS CAGR of 40%, we reckon the discount is
unwarranted; Accumulate ( TP RM1.88 , 14x FY15EPS).
(AK)
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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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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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RM4.40
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+1.6%
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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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RM3.27
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+0.9%
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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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RM1.84
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-0.6%
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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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RM0.70
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+7.6%
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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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RM4.83
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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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RM1.55
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-2.6%
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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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RM1.13
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-0.9%
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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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RM0.565
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0.0%
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Performance
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Positive
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Negative
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Neutral
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