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Economic Research
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29 Aug 2014
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Philippines
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Economic
Highlights
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The
Philippine’s real GDP growth strengthened to 6.4% y-o-y in 2Q 2014,
from a revised +5.6% recorded in
the
1Q and compared with +6.3% in 4Q 2013, on the back of a resurgence in
manufacturing activities and exports. Despite the 2Q GDP figures coming in above
the consensus median estimate of +6.1%, it was, however, below our estimate
of +6.9%. Nonetheless, we are retaining our full-year GDP projection at
6.5% for 2014 and expect growth to pick-up to +7.1% in 2015.
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Friday, August 29, 2014
RHB | Philippines | GDP Growth Strengthened In 2Q As Growth Momentum Improved
AmWatch -DRB-Hicom : 1QFY15 meets consensus; AV8 to the fore BUY, 29 Aug 2014
STOCK FOCUS OF THE DAY
DRB-Hicom : 1QFY15 meets consensus; AV8 to the fore BUY
We maintain BUY on DRB-Hicom Bhd, with an unchanged fair
value of RM3.60/share – a 15% discount to our SOP value of RM4.25/share.
DRB-Hicom’s 1QFY15 core net profit at RM133mil (+13% QoQ; +434% YoY) was within
expectations, making up 27% of consensus estimate. It beat our expectation,
representing 33% of our forecast. As expected, no interim dividend was declared
for the quarter (1QFY14: Nil). At the operating level, EBIT at RM206mil was
within our expectations, accounting for 23% of our forecast. As had been
anticipated, its auto division’s showing has improved further due to
contributions from the RM7.5bil AV8 defence project. Defence and aviation jobs
accounted for 14% of the auto division’s turnover in 1QFY15 vs. only 2% in
1QFY14. Auto component and distribution made up 5% and 81%, respectively, in
1QFY15. Additionally, DRB-Hicom’s 34% associate Honda Malaysia has garnered
additional share – from 8.9% in CY13 to 12.5% (37,203 units) in 1HCY14. Honda
sales more than doubled to 21,576 units in 1QFY15 from 9,856 units a year
earlier. Notably, DRB-Hicom said Lotus’ turnaround was on track, with sales
growing by 31% to 505 units in 1QFY15 from 386 units in 1QFY14. We maintain our
FY15F-FY16F numbers and our BUY call.
Others :
Bonia Corporation : Earnings recovery
intact BUY
Genting Malaysia : Loss in UK on low win % and bad
debts BUY
Genting Bhd : Cushioned by plantation and GenS
BUY
Ann Joo Resoruces : Making a stand against cheap
imports BUY
IHH Healthcare : Inpatient admissions and revenue continue
to grow HOLD
Sunway : 1HFY14 in line with
expectations
HOLD
Lion Industries : Hampered by a huge EI
loss HOLD
Kimlun Corporation : Margin contraction in 1H
HOLD
Malayan Banking : Resilient earnings in 2Q
HOLD
YTL Power : Lower forecasts despite one-off UK tax credit
reversals HOLD
Media Chinese : Further weakness due to weak sentiment and
higher base in the previous
year
HOLD
Tan Chong Motor : 1H14 was bad, brace for tougher 2H SELL
QUICK TAKES
Al-Aqar Healthcare : Steady organic
growth HOLD
Malaysia Airline System : Boosted by lower cost and “other
income” ACCEPT OFFER
NEWS HIGHLIGHTS
Bumi Armada : 214 million Bumi Armada shares traded
off-market
Mah Sing Group : Mah Sing swoops on 105ha Puchong prime
land, plans RM9.3bil project
Malayan Banking : Farid says Maybank still open to mergers
and acquisitions
RHB Capital : RHBCap mulls sale of investment bank
post-merger
Affin Daily Insight (LV) - 29 August 2014 - MAYBANK / IHH / GENT / GENM / YTL / YTL / AEON / SUNWAY / MAS / TRCB / MCIL / BONIA / EVSD / ANNJOO / AQRS / WTK / TONGHERR / ECONOMY - ASEAN OUTLOOK / DMR
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Top Calls
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Results Note � Maybank (BUY, maintain)
- Not a bad 1HFY14, more drivers likely in 2HFY14 Maybank reported a 1HFY14 net profit of RM3,117.1m (+3.4% yoy) while PBT was RM4,454.6m (+5.7% yoy). Lower impairment allowances and a writeback in impairment bolstered Maybank's otherwise flat pre-provision operating profit (PPOP). Although annualized results were below our forecast and the consensus, we continue to look forward to a better 2HFY14, driven by corporate loans growth and IB deals, potential realization of AFS gains, stable NIM, and on-going cost management strategies. Maybank has declared an interim dividend of 24 sen (DRP 20 sen; cash 4 sen). Maintain BUY on Maybank with an unchanged PT at RM12.00 (13.6% ROE, 7% growth rate, and 10.3% cost of equity, translating into a P/BV target of 2.0x). Maybank remains a solid banking group, well-capitalised at a CET1 at 11.4% and a key beneficiary from the roll-out of key fiscal projects.
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Other Calls
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Results Note � YTL Power (BUY, upgrade
from ADD)
- 10 sen surprise DPS made up for earnings shortfall
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Results Note - Ann Joo
Resources (SELL, maintain)
- Oversupply issue remains a threat to steel industry
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Economy � ASEAN Outlook � Weekly Wrap (22 � 28 August 2014)
- Is Spore�s July PMI pointing to stronger IPI growth?
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