Following up from previous call made on 7th May 2013. Yongnam has consolidated for about 2 weeks from 0.32 to 0.35 range. Monitor the breakout of 0.355 and 0.36. Those in view of a breakout can consider locking some positions around this level. Can considering averaging up on the breakout. Near term target price on breakout would be 0.38 to 0.400 level. As long as 0.35 holds as a new support level, short term upside intact.
Stop loss at 0.335.
Maybank KE – 4TH June 2013
Yongnam International: Waiting on the “East Wind”; Buy TP $0.485
YNH SP | Mkt Cap USD341.9m | ADTV USD3.5m
Ø Based on our latest info, we believe the indicative results for both Myanmar airport bids will come soon than earlier expected. We reiterate BUY and will be hosting management on an NDR in Hong Kong in June.
Ø We now expect the award for extension of Yangon airport to arrive any moment. Estimated contract value is USD150m. Ascribing a 50% probability of winning to Yongnam, we add SGD0.045 to our TP.
Ø The company announced a new 5-year SGD130m syndicated loan last week. This will be sufficient to fund the equity contributions for both airport projects. It also implies management is thinking big in terms of contract wins. We believe the impending announcements of the Myanmar airport projects will serve as concrete share price catalysts. We reiterate BUY with a street-high new TP of SGD0.485.
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