Regional Daily, Maybank KE (2014-04-23)

Daily	23 April 2014
TOP VIEWS China Banks | OVERWEIGHT OSIM International (OSIM SP) | TP revision Supalai PCL (SPALI TB) | Results preview Lenovo (992 HK) | TP revision China Banks | OVERWEIGHT Sector update Cutting RRR of rural banks � Limited earnings impact RRR cut will release liquidity of CNY260b to county areas. Limited exposure to rural deposits by H-share banks. Limited earnings impact from RRR cut. Keep OVERWEIGHT. Click here for report » OSIM International (OSIM SP) Watch the cash roll in Share Price: SGD2.39 | Target Price: SGD2.78 (+16%) | MCap (USD): 1.4B | ADTV: USD2M OSIM's net cash holdings look set to swell to SGD300m this year as convertible bond holders exercise their option before July to take advantage of the current share price. This war chest will empower OSIM to acquire and incubate more new brands and generate cash. ONI (GNC) and TWG have proven to be astute buys despite market scepticism. Reiterate BUY with a new Street-high TP of SGD3.45. 1Q14 results to be announced on 6 May. Click here for report » Supalai PCL (SPALI TB) Quality visibility; Sector top pick Share Price: THB19.20 | Target Price: THB23.00(+20%) | MCap (USD): 1.0B | ADTV: USD4M Reiterate BUY with THB23 TP pegged to 9.5x FY14 PE. Expect highest earnings growth in the sector at 44% YoY with 89% of revenue already secured from its high-quality backlog. Presales in March grew 97% MoM to THB2.1b; strongest MoM recovery in the sector. Expect 1Q14 earnings to be THB707m (EPS THB0.41), up 50% YoY but down 60% QoQ. Click here for report » Lenovo (992 HK) Too early to consider Share Price: HKD9.28 | Target Price: HKD7.80 (-16%) | MCap (USD): 12.5B | ADTV: USD82M Lower TP to Street-low of HKD7.80 (12x FY16F PER) to reflect earnings cuts of 7%/12%/15% for 4Q14/FY15/FY16. Earnings prospect may be adversely affected by softer smartphone outlook and the two pending acquisitions, namely IBM's x-system server business and Moto smartphone. Recent pick-up in market liquidity drove the share price, but Street's downward earnings revision on Lenovo intensified recently and unlikely peaked, thus maintain HOLD. Click here for report » COMPANY NOTES Bumi Serpong Damai (BSDE IJ) | Company update Timah (TINS IJ) | Company update AKR Corporindo Tbk (AKRA IJ) | Company update A. Soriano Corp (ANS PM) | Rating change Mapletree Logistics Trust (MLT SP) | Resulta review Thai Market Compass | Sector update Kiatnakin Bank (KKP TB) | Rating change Hong Leong Bank | Company Update Bumi Serpong Damai (BSDE IJ) Raising stake in Plaza Indonesia? Share Price: IDR1,605 | Target Price: IDR2,000(+25%) | MCap (USD): 2.5B | ADTV (USD): 5M Maintain BUY with TP of IDR2,000. BSDE announced yesterday it will execute 875m (5% of outstanding shares) non pre-emptive rights (NPR) shares on 28 April 2014, which will be fully subscribed by parent Sinarmas Group. We believe the NPR proceeds will be used to increase its interest in Plaza Indonesia (PLIN IJ) by acquiring 25.99% stake from parent crossed yesterday. The buyer is expected to confirm the purchase tomorrow. If true, we will view this positively as it will increase BSDE�s investment property exposure and recurring income. Click here for report » Timah (TINS IJ) More positives to come Share Price: IDR1,380 | Target Price: IDR1,700(+23%) | MCap (USD): 898M | ADTV (USD): 2M Maintain BUY with TP of IDR1,700 given positive industry regulatory developments. Positive surprise in 1Q14 earnings and new regulation in the tin sector are the main catalysts. Trades at 1.7x 2015F PBV, a 19% discount to historical mean of 2.1x. Click here for report » AKR Corporindo Tbk (AKRA IJ) Getting more exciting Share Price: IDR4,730 | Target Price: IDR5,500(+16%) | MCap (USD): 1.6B | ADTV (USD): 3M Maintain BUY and TP of IDR5,500. Sales of industrial estate land, resilient coal industry and reduction in fuel subsidies are the main catalysts for the stock. High 2014/15F PER of 25.9x/22.5x is compensated by structural changes in economy and expanding margin driven by higher-margin industrial estate business. Click here for report » A. Soriano Corp (ANS PM) TP boosted by higher investments Share Price: PHP7.09 | Target Price: PHP7.72(+9%) | MCap (USD): 399M | ADTV (USD): 0.0M Downgrade to HOLD despite revising TP to PHP7.72 (from PHP7.64) due to limited upside. BVPS increases on the back of higher end-balance of trading investments. Maintain conservative view on FY14 trading gains. Click here for report » Mapletree Logistics Trust (MLT SP) In dire need of growth Share Price: SGD1.09 | Target Price: SGD1.00(-8%) | MCap (USD): 2.1B | ADTV (USD): 2M FY3/14 results in line with our and market expectations. Japan portfolio still a drag on top line; aggregate revenue and NPI for the past four quarters fell 17% YoY. FY3/14-17E DPU CAGR to be an unexciting 0.3% without concrete growth catalysts. Maintain SELL with TP of SGD1.00. Click here for report » Thai Market Compass Sector update Don�t chase this rally; fundamentals still weak The SET looks to continue decoupling from fundamentals by inching up daily and is now trading at +1xSD above LTM. No fundamental support to the rally, so maintain our negative view on market: Earnings downgrade = SELL in May. At times like this we trade not invest. Our short term picks are AP, INTUCH, KBANK, KCE, KTB, SAT and SCC Click here for report » Kiatnakin Bank (KKP TB) Dividend yield cushion downside Share Price: THB44.50 | Target Price: THB42.00(-6%) | MCap (USD): 1.2B | ADTV (USD): 2M Downgrade to HOLD with revised TP to THB42 (from THB43), implying 8x 2014 PE, 0.9x P/BV and 5.6% dividend yield. Cut 2014 earnings by 12% to reflect weak non-interest income from capital market business. Maintain 2014 loan growth assumption of 8%, supported by corporate loans, with 1.25% credit cost as we expect KKP to book lower losses from auto loan book the rest of the year. Click here for report » Hong Leong Bank | Company Update Strategies bearing fruit Share Price: MYR14.00 | Target Price: MYR16.40(+17%) | MCap (USD): 8.1B | ADTV (USD): 2M We remain positive on HL Bank which is seeing selective traction in lending, as well as growth in NOII. HL Bank continues to offer exposure to the industry�s second most efficient bank with impeccable asset quality. BUY maintained � unchanged MYR16.40 TP on CY14 P/BV of 1.9x, supported by ROEs of 15%. Click here for report »     Click here for full Regional Daily report »