Regional Daily, Maybank KE (2014-07-31)

Daily 31 July 2014 TOP VIEWS Ayala Land (ALI PM) | TP Revision Bharti Airtel (BHARTI IN) | TP Revision Singapore Airlines (SIA SP) | Results Review Persistent Systems (PSYS IN) | TP Revision Ayala Land (ALI PM) Location, location, location Share Price: PHP31.00 | Target Price: PHP40.31 (+30%)| MCap (USD): 10.1B | ADTV (USD): 8M Maintain BUY and raise TP to Street-high PHP40.31 as our NAV estimate rises to PHP44.8. Stock offers 30% upside. Impending award of PPP projects close to several areas in ALI�s land bank will improve accessibility. We conservatively impute a 15% rise in land value for areas to benefit most. Click here for report » Bharti Airtel (BHARTI IN) India business continues to ring strong Share Price: INR373 | Target Price: INR417(+12%) | MCap (USD): 24.8B | ADTV (USD): 30M Maintain BUY with new TP of INR417 (+6%) based on DCF. 1QFY15 EBITDA margin of the India business (+84bps QoQ to 37.7%) beat our forecast and that of the Africa business (-92bps QoQ to 24.3%) missed our forecast. Overall EBITDA margin of 33.6% (+73bps QoQ) was in line with our forecast. We continue to expect the India business to drive improvement in BHARTI's operational performance. We tweak our EBITDA forecast for FY15/16, which is 3%/7% above consensus. (FULL REPORT WILL BE OUT SOON) Singapore Airlines (SIA SP) Decent results amid challenges Share Price: SGD10.60 | Target Price: SGD12.00(+13%) | MCap (USD): 10.0B | ADTV (USD): 9M 1QFY3/15 core net income of SGD34.5m met expectations. Earnings cut by 31-46% for market weakness, to reflect lower management guidance. Still, maintain BUY and TP of SGD12.00, set at 1.05x FY3/15E P/BV, for eventual recovery as airlines cut capacity. Click here for report » Persistent Systems (PSYS IN) Strong uptick in 2Q, the strongest quarter Share Price: INR1,257 | Target Price: INR1,557(+24%) | MCap (USD): 837M | ADTV (USD): 2M Maintain BUY with new Street-high TP of INR1,557 based on PER of 16x FY16F (14x earlier). Our new target PER is the highest among mid-cap IT stocks under our coverage, along with CMC (CMC). PSYS remains one of our top picks among mid-cap IT stocks. 1QFY15 EPS of INR17.2, +2.4%/+20.5% QoQ/YoY was in line with our expectations. EBITDA margin decline of 520bps QoQ, higher than our expectations, was offset by FX gain. We factor lower EBITDA margin and FX gain and increase our FY15/16F EPS by 5%/3%, which is 3%/8% above consensus. (FULL REPORT WILL BE OUT SOON) COMPANY NOTES Sunny Optical (2382 HK) | Results Preview PI Industries (PI IN) | Rating Change Sunway (SWB MK) | TP Revision SMRT (MRT SP) | Results Review Siam Cement (SCC TB) | Results Review Sunny Optical (2382 HK) 1H may miss, margin pressure; HOLD Share Price: HKD10.66 | Target Price: HKD10.50(-2%) | MCap (USD): 1.5B | ADTV (USD): 9M 1H14 results due out 15 Aug. Despite revealing higher-than-expected 1H14 unit sales, Sunny�s earnings may barely reach our and consensus estimates due to falling margins. Reiterate HOLD given valuation premium vs historical trading range, Chinese smartphone demand uncertainties and potential competition from O-film on Mi4. Positives mostly priced in and likely to range trade. Largan our preferred pick in the optical industry due to more rational price competition and its technology leadership. Click here for report » PI Industries (PI IN) 1Q in line, no new triggers; D/G HOLD Share Price: INR397 | Target Price: INR350(-12%) | MCap (USD): 898M | ADTV (USD): 0.7M Cut to contrarian HOLD as strong FY15-16F earnings growth (+30% YoY) potential priced in. Stock trading at 19x FY15F PER and 16x for FY16F, in line with peer Rallis India. 1Q EPS of INR5 +47% YoY supported by a seasonally strong quarter for its agrochemicals business. Its export-based custom chemical business is facing capacity constraint, which won�t be resolved until 3QFY15. We will review our forecasts and TP if the stock corrects or it manages to surprise positively on earnings. Click here for report » Sunway (SWB MK) On track to hit sales target Share Price: MYR3.19 | Target Price: MYR3.05 (-4%) | MCap (USD): 1.7B | ADTV (USD): 0.8M Recent launches well received with decent bookings/take-ups. Raise our FY15/16 earnings forecasts by 8%/12% to factor in changes in take-up assumptions. Maintain HOLD with our revised RNAV-based TP of MYR3.05 (previously MYR2.80) on unchanged 0.59x P/RNAV. Click here for report » SMRT (MRT SP) No updates on rail transition Share Price: SGD1.57 | Target Price: SGD1.36(-13%) | MCap (USD): 1.9B | ADTV (USD): 5M 1QFY3/15 net income of SGD22.4m (+37% YoY) in line. Recent fare hikes helped to narrow losses at fare-based business. Non-fare performed better too. Management remains confident of prospects with impending regulatory changes. No updates were provided. Maintain HOLD and unchanged TP of SGD1.36. Click here for report » Siam Cement (SCC TB) D/G to hold, no catalyst short term Share Price: THB458.00 | Target Price: THB506.00(+10%) | MCap (USD): 17.3B | ADTV (USD): 21M Cut to non-consensus HOLD from BUY given only 10% upside to our DCF-based fair value of THB506. With 2Q14 net profit down by 14% YoY and 1H14 cumulative accounting for 41% of our full-year forecast, SCC is still well in line to meet our target. However, there is no catalyst short term to merit earnings upgrade. 2H presents a mixed outlook with Thailand-based operations remaining poor. Meanwhile, 2015 outlook remains uncertain, although newsflow is positive. Overseas businesses, exports included, have a positive outlook. However, this is c.20% of group hence, not big enough to provide a full offset. Click here for report »