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FLOWS
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Tuesday, 7 October, 2014
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BUY
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TENAGA, PBBANK, CIMB
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SELL
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ASTRO, AXIATA,
AMBANK
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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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MASTEEL (5098)
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7/10/2014
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RM1.03
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ACCUMULATE
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RM1.21
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Stock is now trading close to its 2 months support level of RM1.02.
Its 2Q14 earnings has perked up and surpassed street estimates, primarily due
to better volume sales & operating margins.
Group’s sales volume should be supported by good construction
demand in the Klang Valley and its manufacturing capacity
expansions. Short term upside is likely due to the its stellar growth
potential and the improving steel industry outlook. Group aims to increase
its billet manufacturing capacity by 27% in FY15 & rolling capacity by
20% in FY16. The installation of the new rolling mill in Klang ( capacity
200k tons/annum) by mid 2015 should significantly boost profitability as
Masteel has been selling its excess upstream volume as billet at a lower
margin or outsource the rolling process on a profit sharing basis with the
re-roller. Catalysts for the steel sector include the robust domestic
construction activity with possibly more contracts to be awarded during Budget 2015,
near-term earnings boost from pre-GST stocking up activities, potential
trade action on steel dumping activities by 1Q15, and margin expansion
from stable selling prices and lower raw material cost. Meantime, the group's
proposed Iskandar Malaysia rail project is still awaiting various approvals
from the government. Trading at an undemanding 0.41 P/Bk (vs its historical
trading range of 0.48x ) which implies a forward PE of 7x, Accumulate ( TP
RM1.21 based on P/Bk 0.48x).
(AK)
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MBSB (1171)
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7/10/2014
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RM2.42
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TRIM
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-
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The share price has performed fairly well, following the release
of its 2QFY14 results which beat consensus. It’s worthwhile to note that the
positive variance came from a low loan loss provision. Loan growth remained
flattish, coming from the personal financing segment (73% of total loans) as
the more stringent underwriting household criteria & measures came into
effect from mid 2013. However, corporate loans segment did expand at a
healthy 3.1% q-o-q. In a recent report, RAM Rating Services said
the overall asset quality of the group is still weak despite a large proportion
of its legacy property portfolio having been written off. The gross impaired
financing ratio still stood at 7.5%. RAM also said that regulations
on personal financing that require more stringent underwriting criteria will
compress the group’s financing growth and earnings and that its funding &
liquidity profile remained constrained by its limited ability to accumulate
deposit ( translating into a high financing to deposit ratio of 103.9% as at
end June 2014 ). Trading at P/Bk of 1.6x and PE of 9x FY15, appears fairly
valued given limiting growth outlook; TRIM
(AK)
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Calls for SEPT WEEK 4 / OCT
WEEK 1 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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GADANG (9261)
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29/9/2014
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RM1.73
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Trading BUY
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RM2.10
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RM1.70
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-1.8%
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TAANN (5012)
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29/9/2014
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RM3.87
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Trading BUY
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RM4.50
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RM3.95
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+2.0%
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ORIENT (4006)
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30/9/2014
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RM7.79
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BUY
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RM9.00
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RM7.65
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-1.8%
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TENAGA (5347)
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30/9/2014
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RM12.28
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ACCUMULATE
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RM13.50
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RM12.56
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+2.2%
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IJM (3336)
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1/10/2014
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RM6.47
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BUY
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RM7.20
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RM6.43
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-0.7%
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UNISEM(5005)
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1/10/2014
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RM1.63
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Trading BUY
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RM1.80
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RM1.62
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-0.7%
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WELLCALL (7231)
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2/10/2014
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RM1.63
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ACCUMULATE
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RM1.83
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RM1.62
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-0.7%
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MBMR (5983)
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2/10/2014
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RM2.85
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Trading BUY
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RM3.50
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RM2.86
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+0.3%
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ELSOFT (0090)
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3/10/2014
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RM1.68
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Trading SELL
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-
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RM1.71
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+1.7%
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FABER (1368)
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3/10/2014
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RM3.21
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ACCUMULATE
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RM3.50
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RM3.20
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-0.3%
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Given that
our call initiated on the 22/9 to buy TMCLIFE (0101) has achieved our target
of RM0.60,
we advocate a take profit on the stock.
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Performance
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Positive
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Negative
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Neutral
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