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FLOWS
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Friday, 27 June, 2014
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BUY
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PBBANK,
CIMB, SKPETRO
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SELL
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DIGI, MAXIS, UMWOG
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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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KOSSAN (7153)
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27/6/2014
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RM3.69
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ACCUMULATE
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RM4.86
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The
share price has drifted lower over the past 3 months, shedding c19%. This was
in line with the sector, on the back of concerns over margin compression’s (
re- minimum wage, electricity & natural gas, greater competition ) drag
on earnings. Pricing pressure has also been seen to be intensifying, as
evidenced in the lower ASP. We believe, especially in Kossan’s case, that the
negatives have been reflected in the price. Despite the disapproving cost
structure, demand for rubber gloves is expected to remain strong. In Q12014,
contrary to industry norm, Kossan even recorded margin expansion of 2ppts on
the back of improving efficiencies and product mix. Group is expected to
achieve superior earnings CAGR of 20% in FY14-16, over its peers of c10%.
Earnings growth will be driven by new capacity expansion (22b pieces pa installed
capacity upon completion of 3 new plants in 2015). The growth of its non-core
TRP ( technical rubber product) division which has seen steady progress over
the past few quarters is another catalyst. Trading at an undemanding 12x
FY15, with MACD cutting up, RSI @ 34 – Accumulate ( TP RM 4.86 based on 15x
FY15 EPs).
(AK)
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PRTASCO(5070)
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27/6/2014
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RM1.97
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ACCUMULATE
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RM2.58
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The share price is now trading close to its 3-month
support of RM1.95. Group remains a good small cap proxy to public
infrastructure spending, particularly road maintenance & public housing.
It achieved a net profit CAGR of 15% over the past 2 years ( 2011-13 ) and
expects growth momentum to continue this year & beyond ( management
targeting minimum 15% in FY14). Fundamentals remain healthy – OB of RM1.8b
(for both road maintenance concessions & construction) and unbilled
property sales of RM180m. We also like its flagship integrated property
project “De Centrum” ( involves redevelopment of the 100-acre Infrastructure
University KL land in Bangi that it acquired at a low price) which has a GDV
of about RM10b. Balance sheet remains strong ( net cash of RM86m or 26s per
share) and highly cash generating road maintenance concession will underpin a
likely 10s dividend, which translates to a 5% yield. It’s new O&G venture
( acquired a 63% stake in PT Anglo Slavic Indonesia, comes with profit
guarantee) may also support future earnings growth. We believe Protasco
remains a compelling growth story ; Accumulate ( TP RM2.58 based on 11x FY15
EPS).
(AK)
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Calls for JUNE WEEK 3/ WEEK 4 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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PERDANA (7108)
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20/6/2014
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RM1.80
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ACCUMULATE
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RM2.10
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RM1.89
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+5.0%
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ALAM (5115)
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20/6/2014
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RM1.56
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ACCUMULATE
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RM2.10
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RM1.55
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-0.6%
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CBIP (7076)
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23/6/2014
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RM4.40
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BUY
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RM5.10
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RM4.35
(ex)
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-1.2%
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HOHUP (5169)
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23/6/2014
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RM1.41
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BUY
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RM2.30
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RM1.38
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-2.1%
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KUB (6874)
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24/6/2014
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RM0.555
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TRADING BUY
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RM0.725
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RM0.53
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-4.6%
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GKENT (3204)
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24/6/2014
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RM1.90
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TRADING BUY
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RM2.67
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RM1.86
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-2.2%
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AHEALTH (7090)
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25/6/2014
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RM3.81
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BUY
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RM4.40
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RM3.80
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+0.2%
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FGV (5222)
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25/6/2014
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RM4.41
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BUY
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RM4.80
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RM4.25
(ex)
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-3.7%
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ARMADA (5210)
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26/6/2014
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RM3.52
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ACCUMULATE
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RM4.03
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RM3.45
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-2.0%
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KULIM (2003)
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26/6/2014
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RM3.46
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TRADING BUY
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RM3.98
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RM3.45
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-0.3%
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Performance
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Positive
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Negative
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Neutral
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