CIMB Research: Jaya Tiasa's timber earnings to surge

KUALA LUMPUR: CIMB Equities Research expects Jaya Tiasa's timber earnings to surge in the coming quarters, due to the recent sharp rise in log prices.
It said on Tuesday another factor is the stronger housing starts in Japan, which are likely to support plywood prices in 2H13.
"We upgrade our call from underperform to Trading Buy given the likelihood of a near-term re-rating, driven mainly by stronger timber earnings.
"We raise our FY13-15 EPS by 29-60% to account for the more bullish outlook for timber prices. Our SOP-based target price goes up to RM2.36 as we apply a higher valuation to the group's timber business," it said. 

Source: http://biz.thestar.com.my/news/story.asp?file=/2013/6/25/business/20130625085751&sec=business

My take:

>> RSI is only 40 something at current price of RM2.01 so the downside should be limited.
>> Share price should be supported at RM2.00 which is a strong psychological support.
>> Longer term outlook will really depend on timber prices which is volatile and unpredictable.
>> Assume KLCI does not fall some more below 1725, Jaya Tiasa should be able to appreciate to RM2.25 - RM2.30 level.