SP Setia (HOLD, TP: RM 4.12)
Initiate with a HOLD
§ On track to achieve this year's RM3bn sales target and add to its RM3.46bn unbilled sales.
§ Opening of Setia City Mall in May 2012 to stimulate sales for flagship Setia Alam and Eco Park projects.
§ Regional expansion – making good progress with Fulton Lane development in Australia.
§ Positives: highly liquid proxy to property sector, strong product concepts and pipeline. Well diversified earnings base from 12 on-going projects plus another 15 in the pipeline. Consistent dividend payments.
§ Negatives: Less than 10% upside; highest P/E multiple in the sector (1.9x sector average).
§ Upside is less than 10% (inclusive of dividends) and is unattractive compared to undervalued small-cap developers such as YNH, UMLand and KSL (42%, 48% and 37% upside respectively). HOLD
FBM KLCI - Technical rebound from oversold position
§ Our envisaged supports of 1535 (50% FR) and 1530 (200-d SMA) are still well intact despite external selldown. Further key support is 1520 (61.8% FR). Given oversold position, divergence with RSI and the rebound from the lower Bollinger band, the market is likely to stage a technical rebound.
§ However, as the candles are still trading below the 10-d and 50-d SMAs, the current correction/consolidation could be prolonged. Thus, the market is likely to drift sideways unless the resistance levels at 10-d and 50-d SMAs are broken
Stock to watch - UEMLAND: More upside if 200-d SMA resistance is broken
§ Based on its hourly chart, there could be a technical rebound towards RM2.64-2.68 zones. However, for an uptrend to continue, UEMLAND has to breach the 200-d SMA (now at RM2.65) to begin a fresh rally towards the downtrend line resistance of RM2.80. Further upside targets are RM2.90-3.00.
§ Immediate supports are RM2.45 (uptrend line support) and RM2.40 (76.4% FR). Cut loss below RM2.40.
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