****** Trading Buy: Yongnam. Share price 0.34.

Yongnam has consolidated below 0.34 for about a week and again broke above this 0.34 immediate resistance today. High seen today is 0.35 currently. If the 0.35 level breaks out, can see it go to 0.38 to 0.400 eventually. A follow up from previous call made last Thursday 7^th May 2013 . Top 5 volume seen currently on break out once again which shows upward momentum in placed.

Stop loss below 0.32.

 

Maybank KE: Yongnam Holdings: Positioning Ahead of Contract Wins; Buy TP $0.43
YNH SP | Mkt Cap USD334.9m | ADTV USD2.9m
Ø  Reiterate BUY ahead of 2H13. Our TP of SGD0.43 is pegged to 10x FY13F.
Ø  1Q13 results were largely within expectation. Revenue grew 22% yoy. Profit was flat yoy, but this was in comparison to exceptional margins in the same quarter last year.
Ø  We expect margins to pick up on execution of strutting orderbook which has higher margins and the commencement of new contract wins. Management is gunning for several contracts in 2H13 which will replenish orderbook substantially.

 

 CIMB - A late bloomer  - OUTPERFORM - Maintained | S$0.33 - Tgt. S$0.36

After four quarters of declining revenue and profitability, Yongnam’s return to growth in 1Q13 is a breath of fresh air. We think that its share price outperformance YTD still has legs as the Myanmar project is Yongnam's to lose. At 17% of our FY13 forecast, 1Q13 net profit was in line with our expectation as we stick to our assumption that 65% of this year’s earnings will only come through in 2H13. Our EPS estimates and target price (still at 6x CY14 P/E, its 3-year mean) are unchanged. We maintain an Outperform as the group is poised to land some mega accretive projects.