Company Name: NOTION VTEC BHD
| Research House: HLG | Price Call: BUY | Target Price: 2.58 |
Construction (Overweight)
MRT players shortlisted
'''' Prasarana has shortlisted 28 individual and JV companies eligible to bid for sections of the MRT project, except for the tunnelling portion. There are 18 works packages with 8 packages under elevated civil works; another 8 for elevated station works and 2 packages for depot. These packages are divided into the open and Bumiputera category.
'''' This is a positive step forward in the rollout of MRT, as it shows progress towards the implementation stage. However, it is important to note that the biggest hurdle is usually in the awarding of contracts stage.
'''' The first 2 packages that are to be tendered early next month are the 5.4km stretch from Taman Bukit Ria to Plaza Phoenix; and 5.2km stretch from Taman Suntex to Bandar Tun Hussein Onn.
'''' Despite the recent selldown in construction companies, we continue to maintain our OVERWEIGHT stance for the sector as fundamentals are still intact. Construction companies which we favour still have sizable order books to sustain earnings. Hence, we view the share price weakness as an opportunity to accumulate.
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Notion Vtec (Buy; TP: RM2.58)
9MFY11 results: in-line
'''' 9MFY09/11 core net profit of RM29.4m accounting for about 62% of our and consensus full-year estimates. However, we consider the results within our expectations, as: (1) 2H is seasonally stronger; and (2) we expect the new camera business (i.e. sub-assembly, body mount) to kick in by 2HFY11.''
'''' Earnings forecasts maintained for now, pending further update with management.
'''' TP maintained at RM2.58 based on a 2-year forward average PER of Notion's historical mean of 7.96x.
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FBM KLCI - Relief rally targets are 1500-1530 pts
'''' Some semblance of stability regained yesterday after recent routs, as the markets have probably discounted a fair bit of the adverse developments in US and Europe. Bursa Malaysia's panic selling climax is probably over after 9 Aug's tough of 1423 pts.
'''' However, we will only turn bullish again if the KLCI is able to maintain its posture above 200-d SMA (1530 pts).'' Relief rally targets are 1500, 1510 (50% FR) and 1530. Immediate supports are 1450-1470 pts.
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Stock to watch - GUANCHG: Targeting RM2.87-2.96 resistance zones
'''' GUANCHG reported a commendable 2Q11 results as bottom line surged 82% yoy and 18% qoq to RM35m. It also declares a 3 sen 2nd interim dividend (ex-date 25 Aug).
'''' Technical readings remain conducive for further breakouts with resistance targets at RM2.87-2.96. Support is RM2.50. Cut loss below RM2.50.
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