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FLOWS
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Wednesday, 12 November, 2014
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BUY
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TENAGA, GENTING, AXIATA
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SELL
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MAYBANK, PBBANK,
IOIPG
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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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DAYANG (5141)
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12/11/2014
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RM2.82
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ACCUMULATE
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RM3.30
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Stock has fallen 26.4% from its July high to
near its long-term support of 2.72-2.76 (low in July-Sept'13). In fact, it
tested 2.72 recently in Oct & held its support. Dayang's earnings are
assured for the next 4-5 years with an orderbook of RM4.5b (4.47x FY14
consensus turnover). About 80% of the orderbook consist of 5-year hook up
& commissioning (HUC) contracts which commenced in 2014, while the
balance are for topside maintenance activities. These are for resilient
shallow water brown field projects which have low pdtn costs of
USD30-50/barrel. Dayang is also bidding for RM1b of EPCC contracts & a
potential near-term catalyst is it is tipped to win at least >RM400m of
the contracts tendered. Valuation is attractive with forward FY15 PER of
10.1x. Dayang is also one of the few remaining big cap syariah compliant
stock. Accumulate on weakness
(LJN/PT)
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SEM (5250)
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12/11/2014
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RM1.66
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REDUCE
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-
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Operating environment
continues to deteriorate with lower disposable income as the govt attempts to
improve its fiscal position with reduction in subsidies and the
implementation of GST in early 2015. History shows in c'tries where GST were
first introduced, the c'tries suffered negative growth for at least a year,
followed by stagnation or tepid growth for a year or two before the
resumption of normal growth. Hence, the aggressive network expansion plan by
SEM of a net increase of 600 new stores over the next 3 years may be a
double-edged sword if the economy swoons badly & causes a sharp reduction
in domestic spending. Despite its dominant mkt share in terms of outlets,
SEM's stores do not enjoy the customer loyalty of the proprietor-run
moms-&-pops stores with their personal services & knowledge of their
customers, or can they compete on pricing or range of pdts of the super or
hyper markets. Hence, its stores are more akin to retail outlets at petrol
kiosks where one patronises when one happens to be there rather than a
conscious deliberate action to shop in a certain place for its pricing,
convenient range of pdts, ambience or its friendliness. This would mean the
average amount spent by its customer is significantly lower than its
aforesaid competitors. Yet it trades at FY15 PER of 25.2x, which is >15%
premium over its regional peers & significantly above mkt PER. It has
weak technicals of lower highs & lower lows, coupled with the possibility
of having broken key support of RM1.67.Reduce exposure in the stock.
(LJN/PT)
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Calls for NOV WEEK 1 / WEEK 2
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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SOP (5126)
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4/11/2014
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RM5.75
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ACCUMULATE
on weakness
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RM6.20
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RM5.85
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+1.7%
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MMCCORP (2194)
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4/11/2014
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RM2.58
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BUY
– closer to RM2.30
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RM2.80
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RM2.45
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-5.1%
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PARKSON (5657)
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5/11/2014
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RM2.52
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BUY
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RM3.10
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RM2.40
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-4.8%
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SIME (4197)
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5/11/2014
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RM9.68
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BUY
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RM10.50
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RM9.65
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-0.4%
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KPS (5843)
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7/11/2014
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RM1.75
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Take Profit
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RM1.58
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RM1.68
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-4.0%
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SKPETRO (5218)
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7/11/2014
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RM3.14
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BUY
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RM3.75
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RM3.09
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-1.6%
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E&O(3417)
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10/11/2014
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RM2.55
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ACCUMULATE
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RM3.36
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RM2.49
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-2.4%
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KIMLUN (5171)
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10/11/2014
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RM1.42
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SELL
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-
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RM1.45
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+2.1%
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SUNWAY (5211)
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11/11/2014
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RM3.19
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ACCUMULATE
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RM3.70
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RM3.18
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-0.4%
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BJAUTO(5248)
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11/11/2014
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RM3.25
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ACCUMULATE
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RM4.00
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RM3.42
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+5.2%
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Performance
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Positive
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Negative
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Neutral
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