Monday, July 7, 2014

Morning Call | 7 July 2014


FLOWS
Monday, 7 July, 2014
BUY
CIMB, AXIATA, MAYBANK
SELL
MAXIS, ASTRO, IOICORP
STOCK ALERT
STOCK NAME
DATE
PRICE
BUY/SELL
TARGET PRICE
KPJ (5878)
7/7/2014
RM3.63
SELL into strength
-
Share price is on a 6 day winning streak outperforming the broad market as it rose 20+% over the the past 3 months albeit a lack in catalyst. From the latest conference in June, the group has presented its expansion strategy that will focus on building another 9 hospitals in Malaysia within the next 9 months. This however will not reflect any boost in earnings immediately and the group will continue to report tepid growth in earnings as the private hospital operators will face heavy regulatory burdens for setting up new hospitals in Malaysia as well as a heavy start up costs.  From a technical perspective, the indicators show limited upside from here on out and is expected to correct downwards towards the 50 days SMA or support at RM3.35-RM3.40. RSI currently at 76% over bought, which is also its highest point for the year. Valuations currently stood at 32x for FY14 which is close to its 7 year high of 33x, pays 1.6% yield. Sell into strength/Switch to Hovid/Pharmaniaga for a cheaper healthcare exposure.
(RL)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TURBO (5167)
7/7/2014
RM1.35
ACCUMULATE
RM1.60
Group is a small cap Singapore based company which supply and maintenance of various types of pumps (centrifugal and metering), rotating equipment (compressors, industrial fan) to the O&G and petrochemical industry players such as MNC, CHEVRON and EXXON Mobil. While the company draws majority of its earnings from Singapore (>90%), we’re expecting more contribution from the Malaysian segment going forward as it could very well be one of the beneficiaries of the RM60bn RAPID project that’s expected to dish out more contracts in 2nd half. The company is highly efficient due to its low capex and asset light model which has showed their ability to increase margin towards the 20% range within the last few years. The company is also a net cash with RM0.39 in cash which the group is devoted on paying a dividend (3.7% with a chance of a regular special div) to reward its shareholders. Valuations trading at a slight premium at 13x for FY14 although still lower than its peers or 15x. Technical indicators are currently ripe for a breakout as it consolidated well at current levels. Accumulate on any weakness on being proxy to RAPID and other o&g jobs as well as attractive dividend yield.
(RL)
 
 
 
Calls for  JUNE WEEK 3/ WEEK 4 2014
STOCK
Initiation Dates
Initiation price
BUY/SELL
TARGET PRICE
LAST PRICE
% Change since Initiated
SCIB (9237)
30/6/2014
RM0.665
ACCUMULATE
RM0.80
RM0.725
+9.0%
AIRASIA (5099)
30/6/2014
RM2.30
BUY
RM3.10
RM2.28
-0.9%
TDM (2054)
1/7/2014
RM1.04
ACCUMULATE
RM1.20
RM1.04
0.0%
MHB (5186)
1/7/2014
RM3.72
BUY
RM4.10
RM3.78
+1.6%
MUDAJYA (5085)
2/7/2014
RM2.51
BUY
RM2.85
RM2.55
+1.5%
TAS (5149)
2/7/2014
RM1.50
ACCUMULATE
RM1.70
RM1.55
+3.3%
SONA (5241)
3/7/2014
RM0.485
Trading BUY
RM0.60
RM0.48
-1.1%
CYPARK (5184)
3/7/2014
RM2.81
ACCUMULATE
RM3.20
RM2.84
+1.0%
GOB (1147)
4/7/2014
RM1.03
Trading BUY
RM1.40
RM1.02
-1.0%
WPRTS (5246)
4/7/2014
RM2.72
ACCUMULATE
RM3.12
RM2.69
-1.2%
 
 
Performance
Positive
 
Negative
 
Neutral