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FLOWS
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Monday, 5 January, 2015
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BUY
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MAYBANK, SKPETRO, AMBANK
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SELL
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FGV, DIGI, GENM
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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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KAREX (5247)
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05/01/2015
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RM3.41
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TRIM
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RM3.00
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The share price has surged c25% over the past
3 months, largely on the back of the group’s improving margins, favorable
operating environment, capacity expansion plans and expansion / growth
strategy following the recent acquisition of Global Protection. The group
targets to achieve annual capacity of 5b pieces by end FY15, 6b in FY16 and
7b in FY17. Following the price rise, group is now trading at c22x for
FY6/15, compared to the average PE multiple of its international peers of
19-20x. We reckon the positives have been reflected in the price and appear
fairly valued at this time. Downside risk include the group’s high dependency
on foreign labour and lack of long term contracts with customers. MACD on the
verge of cutting down, RSI @ 67 – Trim (buyback at support level of RM3.00).
(AK)
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TGUAN (7034)
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05/01/2015
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RM1.95
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BUY
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RM2.54
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Share price has consolidated around the RM1.88
level, following its fall from recent high of RM2.32. We see this as a good
buying opportunity. The prospects of the plastics & packaging sector is
bright, given the decline in raw material prices ( lower crude oil ) leading
to margin expansion, strengthening USD/MYR exchange to benefit exporters and
that plastic players face minimal impact from GST implementation. More
specifically, TGUAN is poised to expand by 18% CAGR over the next 3 years,
has dividend yield of c4% and trading at an attractive PE of 6x for FY12/15 (
vs Scientex 9x & peers target valuation of 8-10x). Group’s expansion into
high end plastic packaging and the PVC food wrap business will drive growth.
Capex is planned at about RM100 for the next few years (group raised RM52m
from the ICULS issue last September to part finance this). At current price,
stock is trading well below its book value of RM2.89 – Buy (TP RM 2.54 based
on 7x FY15).
(AK)
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Calls for Jan WEEK 1 2015
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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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SUPERMX (7106)
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02/01/2015
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RM1.68
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BUY
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RM1.95
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RM1.69
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+0.5%
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PTARAS(9598)
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02/01/2015
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RM3.73
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ACCUMULATE
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RM4.20
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RM3.73
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0.0%
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Performance
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Positive
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Negative
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Neutral
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