Regional Daily, Maybank KE (2014-03-21)

Daily 21 March 2014 TOP VIEWS SP: Singapore Land Transport | UNDERWEIGHT China Resources Ent (291 HK) | Rating change Bank of Chongqing (1963 HK) | TP review Singapore Land Transport Rail transition: Devil�s in the details Sector update Imminent move to a sustainable rail operating model but details on transition terms lacking. Treatment of rail assets owned and operators' asset purchase obligations are key obstacles to the transition in our view. Maintain SELL on SMRT; retain BUY on ComfortDelGro. SMRT has higher exposure to rail network than ComfortDelGro. Click here for report » China Resources Ent (291 HK) Correction done but HOLD for now Share Price: HKD19.76 | Target Price: HKD18.75 (-5%) | MCap (USD): 6.1B | ADTV: USD10M Upgrade to HOLD (from contrarian SELL) as the stock is close to our TP of HKD18.75 (24x FY14 PE ex-Tesco). CRE has fallen ~30% since 4Q13 on concerns of Tesco�s earnings drag. Management�s upbeat guidance on Tesco yesterday could boost the stock. Suggest long-only funds to look for entry opportunities, and for traders to cover their short positions. We are cautiously optimistic on its target of turning around Tesco in 3 years. But trading at 1x book (ex-Tesco), downside appears limited. Kingsway�s narrowing losses is also positive. Click here for report » Bank of Chongqing (1963 HK) A marginal undervalued play Share Price: HKD4.81 | Target Price: HKD5.90 (+23%) | MCap (USD): 1.7B | ADTV: USD0.3M Better asset & liability management and cost-income ratio Concerns over overdue loans and investment in risky assets Keep BUY with lower TP given higher market-risk premium Click here for report » COMPANY NOTES Manila Electric Co. (MER PM) | Results review Siam Commercial Bank (SCB TB) | Company update Manila Electric Co. (MER PM) Strong volume, higher rates boost profits Share Price: PHP289.60 | Target Price: PHP280.00(-3%) | MCap (USD): 7.3B | ADTV (USD): 2M Maintain HOLD and TP of PHP280. 2013 results in line with guidance. Regulatory risks still a concern for 2015. Click here for report » Siam Commercial Bank (SCB TB) Facing macro headwinds Share Price: THB156.00 | Target Price: THB158.00(+1.3%) | MCap (USD): 16.7B | ADTV (USD): 31M Maintain HOLD with revised TP to THB158 (from THB160) after we reduce 2014/15 EPS by 2%/4%. We cut loan, Non-NII growth and revise up credit costs to factor in the weak economic outlook. Prefer KBANK and KTB. SCB slashes GDP growth to 2.4% from 3.0%, assuming functional government can be set up in 1H14. We expect earnings to grow 5% YoY this year, supported by its strategies of lower deposit costs, building Non-NII from commercial segments and decelerating OPEX growth rate. Click here for report »     Click here for full Regional Daily report »