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FLOWS
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Friday, 31 October, 2014
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BUY
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CIMB, MAYBANK, PCHEM
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SELL
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FGV, IOIP, MAXIS
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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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31/10/2014
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RM0.97
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ACCUMULATE
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RM1.18
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Following
recent market weakness, group’s valuation has fallen to more attractive
levels of 8.2x for FY02/16 and 6.7x for FY17. This makes it one of the
cheapest small cap O&G plays in the market. The 1HFY15 net profit was in
line with expectation, while the 2H is expected to be stronger as new orders
from RAPID start to flow in progressively. It’s estimated that group could
potentially secure sales of RM1b from RAPID over 2015-18. This was based on
management’s guidance that 5% of RAPID’s total value may be awarded to local
PVF contractors. Stock also offers 20% 3-year CAGR, 4.5% dividend yield and a
clean Balance Sheet with only 0.3x gearing, which is a rarity for local
O&G plays. Another positive is that group might be included in the
Syariah compliant list at the November review – Accumulate (TP RM 1.18 based
on 10x FY16 EPS).
(AK)
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AIRPORT (5014)
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31/10/2014
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RM7.26
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TRIM
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RM6.60
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The share price rebounded significantly following
the announcement of the acquisition of a 40% stake in Istanbul Sabiha Gokcen
Airport (ISG) for EUR285m (RM1.2b). We see this as a selling opportunity in
this uncertain market conditions. ISG is currently loss making, thus the
transaction will be earnings dilutive to the group. The funding structure for
the acquisition is still uncertain at this juncture and may pose a problem,
as equity financing will cause further earnings dilution while excessive debt
financing may affect the group’s credit rating (may breach the covenant
attached to MAHB’s Sukuk program and its AAA rating). Other negatives include
the threat that ISG will face additional competition form a new 3rd
airport in Istanbul that is targeted for completion in 2018, lack of a local
partner and high foreign exchange risks. Weak traffic data in recent months
for its Malaysian operations is also a concern. Given the high earnings risk
of the acquisition & weakening trend of traffic data – Reduce
exposure into strength now and possible re-entry below RM6.60.
(AK)
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Calls for SEPT OCT 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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HOVID (7213)
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24/10/2014
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RM0.375
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Defensive BUY
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RM0.43
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RM0.385
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+2.6%
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PADINI (7052)
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24/10/2014
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RM1.67
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BUY on weakness
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RM2.10
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RM1.81
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+8.3%
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MHB (5186)
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27/10/2014
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RM2.32
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ACCUMULATE
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RM2.68
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RM2.26
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-2.6%
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IJMLAND (5215)
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27/10/2014
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RM3.30
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ACCUMULATE
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RM3.60
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RM3.44
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+4.2%
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TGUAN(7034)
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28/10/2014
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RM2.00
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ACCUMULATE
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RM2.48
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RM2.02
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+1.0%
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MAXIS (6012)
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28/10/2014
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RM6.68
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Switch - DIGI
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-
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RM6.74
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+0.8%
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DELEUM (5132)
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29/10/2014
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RM1.88
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ACCUMULATE
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RM2.55
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RM1.97
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+4.7%
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ECONBHD (5253)
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29/10/2014
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RM0.94
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Trading BUY
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RM1.15
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RM0.945
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+0.5%
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VITROX (0097)
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30/10/2014
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RM2.42
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ACCUMULATE
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RM2.80
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RM2.50
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+3.3%
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MAYBULK (5077)
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30/10/2014
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RM1.48
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ACCUMULATE
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RM1.75
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RM1.53
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+3.3%
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Performance
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Positive
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Negative
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Neutral
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