Regional Daily, Maybank KE (2014-04-25)

Daily 25 April 2014 TOP VIEWS Largan Precision (3008 TT) | TP revision Vale Indonesia (INCO IJ) | TP revision Matahari Putra Prima (MPPA IJ) | TP revision Genting Malaysia (GENM MK) | Company update Largan Precision (3008 TT) Structure positives remain; BUY Share Price: TWD1,755 | Target Price: TWD2,305 (+31%) | MCap (USD): 7.8B | ADTV: USD40M Maintain BUY with new TP of TWD2,305 on upward earnings revision. Keep our above consensus estimates as we believe Street has not fully understood the power of OIS. Major catalysts: 1) 1Q14 GM and EPS nicely beat; 2) management's view on strong high end lens demand; and 3) accelerating camera advancements trend. Global leadership position remains secure. Quality of earnings and ROIC to reach new high of 90-100% (FY14-16) vs 50% (FY07-12) and trigger valuation re-rating. Click here for report » Vale Indonesia (INCO IJ) Nickel market: salt in the wound Share Price: IDR3,705 | Target Price: IDR4,600(+24%) | MCap (USD): 3.2B | ADTV: USD5M Maintain BUY with new Street-high TP of IDR4,600 on higher nickel price forecasts. Our TP suggests 2015F PBV of 1.9x, in-line with long term mean but 24% lower than 2011 mean of 2.5x. Rally in nickel prices remains the main catalyst for the stock. Click here for report » Matahari Putra Prima (MPPA IJ) On the right track Share Price: IDR2,700 | Target Price: IDR3,500(+30%) | MCap (USD): 1.3B | ADTV: USD9M Maintain BUY on this under-researched stock as we raise TP to IDR3,500 on better-than-expected growth outlook. Our revised TP implies 1x price to FY15F sales (or 38x FY15F PER), which is still at a discount to peers� aggregate of 1.4x. Adjusted up our FY15-16F earnings by 19-21%. Expect margin improvement to kick in faster than expected on stronger growth rate and aggressive expansion. Click here for report » Genting Malaysia (GENM MK) Taking a bet on upstate New York Share Price: MYR4.20 | Target Price: MYR4.74 (+13%) | MCap (USD): 7.3B | ADTV: USD4.6M GENM is likely to bid for a casino license in upstate New York. We leave our estimates unchanged pending further details. Maintain BUY and MYR4.74 DCF-based TP. Click here for report » COMPANY NOTES ASM Pacific Technology (522 HK) | Rating change Bank of China (Hong Kong) (2388 HK) | Results review Bank of China (3988 HK/601988 SH) Bank Rakyat Indonesia (BBRI IJ) | Results review Tiga Pilar Sejahtera (AISA IJ) | Results review Unilever (UNVR IJ) | Results review Jollibee Foods (JFC PM) | Company update Suntec REIT (SUN SP) | Results review SMRT (MRT SP) | Flash note L.P.N. Development (LPN TB) | Results preview ASM Pacific Technology (522 HK) Met expectations at last! Up to HOLD Share Price: HKD82.80 | Target Price: HKD72.00 (-13%) | MCap (USD): 4.3B | ADTV (USD): 8M Upgrade to HOLD from SELL with revised TP of HKD72 on 20x FY16 PER as we raise our FY15/16 EPS forecast by 13/20%. Cyclical recovery and a lowered cost base may lead to margin expansion. But a sustainable recovery depends on product mix, competition and end-market demand. Stock has partially factored in the recovery, while valuation is not a bargain. Upside may be capped by further potential disposal of parent company stake and 6.5% dilution from CB. Click here for report » Bank of China (Hong Kong) (2388 HK) 1Q14 Operating Data � Tight capital constraint remained Share Price: HKD22.30 | Target Price: HKD19.60(-12%) | MCap (USD): 30.4B | ADTV (USD): 35M Higher NIM offset by weaker non-interest income in 1Q14. Low CET1 CAR remains as key concern. Maintain SELL with same TP of HKD19.60. Click here for report » Bank of China (3988 HK/601988 SH) 1Q14: Preparing for the rainy days Share Price: HKD3.42/CNY3.23 | Target Price: HKD4.30/CNYna | MCap (USD): 118.4B | ADTV (USD): 131M Seasonal strong loan, deposit and net fees growth in 1Q14. Accumulating excess loan provisions of CNY7b in 1Q14. Adoption of AIRB will enhance CET1 CAR. Maintain BUY & TP. Click here for report » Bank Rakyat Indonesia (BBRI IJ) 1Q14 profit beats estimates; top BUY Share Price: IDR10,025 | Target Price: IDR11,000 (+10%) | MCap (USD): 21.8B | ADTV (USD): 34M Maintain as top BUY, IDR11,000 TP. The IDR5.9t 1Q14 net profit (up 18% YoY) topped both our estimate and consensus. Expansion in high-yield lending is expected to overshadow the anticipated rise in funding cost. The sell-off due to the planned acquisition of Bank Mutiara is a buying opportunity. Click here for report » Tiga Pilar Sejahtera (AISA IJ) No Major Surprises Share Price: IDR2,080 | Target Price: IDR2,200(+6%) | MCap (USD): 523M | ADTV (USD): 1.0M FY13 results largely in-line with our estimates backed by 49% YoY food revenue growth and 40.5% YoY EBIT growth. Gross margin slightly improved, but net margin was flat YoY. Maintain BUY and IDR2,200 TP (13.7x FY15F PER) pending review. Click here for report » Unilever (UNVR IJ) Still Under-Pressure Share Price: IDR29,975 | Target Price: IDR22,350(-25%) | MCap (USD): 19.7B | ADTV (USD): 5M Reiterate SELL with TP of IDR22,350, which implies 30x FY14F PER. 1Q14 revenue in-line, but net profit below estimates. Margins contracted by 300bps due to higher royalty expenses. Click here for report » Jollibee Foods (JFC PM) Margin erosion to be temporary Share Price: PHP173.20 | Target Price: PHP191.00(+10%) | MCap (USD): 4.1B | ADTV (USD): 2M Earnings cut 7% this year and 3% next year due to cost pressures. Relief on margins expected to come from healthy SSSG and series of small price increases. Maintain BUY and TP of PHP191. Click here for report » Suntec REIT (SUN SP) All eyes on Suntec City AEI Share Price: SGD1.74 | Target Price: SGD1.70(-2%) | MCap (USD): 3.1B | ADTV (USD): 12M 1Q14 results in line; No DPU top-up for the first quarter since 4Q12. Average rent for Phase 1 and 2 AEI hit SGD12.69 psf/mth, above original target of SGD12.59 psf/mth. Maintain HOLD with a higher DDM-derived TP of SGD1.70 Click here for report » SMRT (MRT SP) Share price surged� avoid the hype Share Price: SGD1.22 | Target Price: SGD0.60(-51%) | MCap (USD): 1.5B | ADTV (USD): 1M Share price surged 18.5% to its highest since 10 Dec. While a favourable transition of its business model is likely, this surge is speculative in the absence of announcements by the regulators or operators. Maintain Sell with TP of SGD0.60, based on 14x average EPS for FY3/14-16. Click here for report » L.P.N. Development (LPN TB) Not yet its time; Prefer AP & SPALI Share Price: THB17.60 | Target Price: THB14.00(-20%) | MCap (USD): 803M | ADTV (USD): 4M Maintain Contrarian SELL, THB14 TP at low end of Street. Demanding valuation at 11.2x PE (+1SD over 7-yr avg) with flat growth in FY14F. Too early to bet on FY15 growth. Expect 1Q14F earnings to be THB350m (EPS THB0.24), a 3% YoY drop. Results will be announced on 9 May. 1Q14 presales were THB3.2b (-53% YoY) due to weak take-up rate on new launched projects; biggest drop in the sector. Click here for report »     Click here for full Regional Daily report »