Regional Daily, Maybank KE (2014-03-25)

Daily

25 March 2014

TOP VIEWS ASEAN Consumer | OVERWEIGHT Supalai PCL (SPALI TB) | Company update Ctrip.com International (CTRP US) | Company update Pegatron Corporation (4938 TT) | Results review ASEAN Consumer | OVERWEIGHT Sector update Marketing feedback - Stay invested Interest level in the sector is high, with many funds willing to explore lesser-known names as well. Main pushback is on valuations, but we think these are justified by growth. We remain most bullish on Vietnam, Indonesia and the Philippines, which we coin the VIP markets. In particular, we think Vietnam remains under-invested. Underpenetration of modern retail and rising income levels will continue to drive structural growth for consumer companies in these markets. Maintain Overweight. Click here for report » Supalai PCL (SPALI TB) Bucking the trend Share Price: THB17.70 | Target Price: THB23.00(+30%) | MCap (USD): 939M | ADTV: USD3M Maintain BUY. Top sector pick. Target price of THB23 pegged to 9.5x FY14F PE. Reported a strong take-up rate of 70% (THB770m) of its first condominium project launched this year in Bangkok (worth THB1.1b). Beat our expectation of 50%. Expect Mar-14�s pre-sales growth on MoM basis to be the strongest in the sector, which could be a short-term catalyst. Click here for report » Ctrip.com International (CTRP US) | Company update Buy on dips, security issue blocked Share Price: USD49.48 | Target Price: USD82.00(+66%) | MCap (USD): 6.4B | ADTV: USD223M Maintain BUY and Street-high target price of USD82. Suggest accumulate on share-price weakness, sparked by user information security concerns reported by Wooyun.org. Security breach of customer data was immediately blocked by the company. Similar incidents on other websites also had little lasting impact. In short, our positive investment thesis on Ctrip is unaffected. Click here for report » Pegatron Corporation (4938 TT) Solid 4Q & 2014 margin trend Share Price: TWD43.00 | Target Price: TWD55.00(+28%) | MCap (USD): 3.3B | ADTV: USD12M Maintain BUY and Street-high target price of TWD55. We believe the Street underestimates Pegatron's earnings power driven by its better product mix, diverse smartphone customer base and production efficiency improvements. We expect the Street to revise up its estimates. Our 2014 EPS is 11% higher than consensus. Click here for report » COMPANY NOTES SapuraKencana Petroleum (SAKP MK) | Results review Philippines Banks | NEUTRAL CDL Hospitality Trusts (CDREIT SP) | Company update Thailand Hotels | OVERWEIGHT Thailand Healthcare | OVERWEIGHT SapuraKencana Petroleum (SAKP MK) Results within range Share Price: MYR4.30 | Target Price: MYR5.30 (+23%) | MCap (USD): 7.8B | ADTV (USD): 12.3M FY14 results meet expectations, accounting for 103%/ 95% of our / consensus full-year forecasts. Newfield Malaysia, consolidated from Feb 14, will drive group earnings: MYR116m in FY15 and MYR447m in FY16. Maintain BUY and MYR5.30 SOP TP. Click here for report » Philippines Banks | NEUTRAL Sector update Make way for Tier 2 notes Metrobank�s new Basel III-compliant Tier 2 notes priced at 5.375% may encourage other banks to follow. Abundant domestic liquidity can support banks� capital requirements. Capital adequacy ratios may increase 70-350bps in the process while net interest income may fall 0.7%-4%. Top picks in the sector are RCB and PNB for upside potential of more than 20%. Click here for report » CDL Hospitality Trusts (CDREIT SP) FY14 a better year for hospitality Share Price: SGD1.62 | Target Price: SGD1.75 (+8%) | MCap (USD): 1.2B | ADTV (USD): 1M Expect hotel room supply to register 5.7% CAGR over 2013-2015, in line with demand growth. Expect corporate bookings to be more favourable in 2014 as the USD strengthens against the SGD. Brace for a tactical recovery this year with the hospitality outlook turning more positive. Click here for report » Thailand Hotels | OVERWEIGHT Sector update Feedback from KL/SG/HK marketing The feedback from our marketing trip was positive on strong Thai tourism industry prospects. Many investors cautious in price movement that bound back 14% YTD. Most questions were on: i) occupancy rate recovery; ii) timeframe for tourists to return to Thailand; iii) chances of success for ERW�s Hop Inn; iv) Bangkok room supply during 2014-16. MINT is our top BUY; ERW is aggressive BUY on Hop Inn project. HOLD CENTEL. Click here for report » Thailand Healthcare | OVERWEIGHT Sector update Feedback from KL/SG/HK marketing We met more than 60 investors during our marketing trip in Malaysia, Singapore, and Hong Kong last week. Feedback to our investment thesis was positive and most agree on the strong long-term industry outlook. However, market-timing is key to healthcare investing. Most questions were on: i) operational improvement from political turmoil and newly opened hospitals; ii) doctor shortages; and iii) short-term catalysts for the sector. BCH is our contrarian BUY. Also BUY BH. HOLD BGH and CHG. Click here for report » ECONOMICS Singapore CPI, Feb �14 Economics Sharp slowdown to 0.4% YoY Inflation rate in Feb 2014 eases to +0.4% YoY (Jan 2014: +1.4% YoY), mainly on lower transport costs. Core inflation rate (CPI ex-accommodation and private road transport) also posts slower increase of +1.6% YoY (Jan 2014: +2.2% YoY). We continue to see domestic cost pressures as main drivers for Singapore�s inflation going forward. Click here for report »     Click here for full Regional Daily report »