Regional Daily, Maybank KE (2014-09-08)

Daily 08 September 2014 TOP VIEWS China Consumer Staples | UNDERWEIGHT Malaysia Banks | NEUTRAL Robinsons Retail (RRHI PM) | TP Revision Concepcion Industrial (CIC PM) | TP Revision China/HK Consumer Staples Sector Update Alerts: key news on dairy sector Reiterate BUY on Want Want China as structural NZ milk powder weakness safeguards its margins profile in 2015F onwards and increases its competitiveness against PRC peers. Late CNY also positive for its 2015F EPS (base case:+15% YoY). Maintain SELL on China Mengniu rising threat to its Milk Deluxe from competition and worsening cost disadvantage against peers (as its more rigid raw milk contracts with scalable suppliers). Imported UHT or NZ milk powder-based products should have more room for discounts to boost sales. Of note, Milk Deluxe�s volume only up ~5% in 1H14. Biostime may benefit from the weak Euro as 80% of COGS imported from Europe. However, the savings take time given order lead time of 6-9 months. Internal transition and new online strategies execution remain near-term risk. Click here for report » Malaysia Banks Sector Update Alerts: key news on dairy sector Sector core EPS growth cut yet again, to 5% from 7.6% for 2014 and to 9.1% from 9.8% for 2015. Average ROE to trend lower from 15.4% in 2013 to 14.1% in 2014 and 13.6% in 2015. Operating environment still challenging. Stay NEUTRAL. BUY AFG, HL Bank and HL Financial Group. Click here for report » Robinsons Retail (RRHI PM) TP raised as share price revives Share Price: PHP66.80 | Target Price: PHP91.00 (+36%) | MCap (USD): 2.1B | ADTV (USD): 2M Raising TP 17.4% to Street-high of PHP91 based on 12.7x FY15F EV/EBITDA. Recent share price weakness undeserved as healthy 1H14 results outshone main competitors. Reiterate BUY with robust 1H14 results likely to be sustained. Click here for report » Concepcion Industrial (CIC PM) Hot sales for aircon and ref in 1H14 Share Price: PHP40.00 | Target Price: PHP46.00 (+15%) | MCap (USD): 239M | ADTV (USD): 0.3M CIC grew earnings robustly, +45% in 2Q14, +54% in 1H14. Strong sales were sustained and margins improved. Maintain BUY with revised TP of PHP46 (20x 2015F PER) post 30% stock dividend. Click here for report » COMPANY NOTES Mah Sing Group (MSGB MK) | Company Update Felda Global Ventures (FGV MK) | Company Update CIMB Group Holdings (CIMB MK) | Company Update United Overseas Bank (UOB SP) | Company Visit Mah Sing Group (MSGB MK) The �Manhattan� in Puchong Share Price: MYR2.59 | Target Price: MYR2.96 (+14%) | MCap (USD): 1.2B | ADTV (USD): 1.0M The upcoming Puchong project (near IOI Mall) will likely be the key sales driver from 2016 onwards. Management remains confident to hit its FY14 sales target; it does not discount the possibility of raising money from the capital market to fund its aggressive landbank expansion. Maintain earnings forecasts, MYR2.96 RNAV-based TP. BUY. (FULL REPORT WILL BE OUT SOON) Felda Global Ventures (FGV MK) Takeaways from analyst briefing Share Price: MYR3.86 | Target Price: MYR3.97 (+3%) | MCap (USD): 4.4B | ADTV (USD): 1M APL estates were offered at a 25% premium to market value. Profitability can only be achieved from FY17 onwards. Post-acquisition, the biodiesel plant will be retrofitted to use cheaper PFAD (non-food) feedstock to enhance return. Maintain HOLD with unchanged SOP-based TP of MYR3.97. Click here for report » CIMB Group Holdings (CIMB MK) Negotiations commencing over APH Share Price: MYR7.38 | Target Price: MYR7.60 (+3%) | MCap (USD): 19.5B | ADTV (USD): 13M Signing of HOA with a consortium led by ENOC is positive for potential rejuvenation of APH. CIMB�s loan exposure purported to be MYR840m of which about 70% provided for. Resolution of issue is positive to the eventual recovery of this loan. HOLD maintained with an unchanged TP of MYR7.60 (CY14 P/BV of 1.7x. Click here for report » United Overseas Bank (UOB SP) Consistent deliverer Share Price: SGD22.73 | Target Price: SGD25.30 (+11%) | MCap (USD): 29.3B | ADTV (USD): 34M Broadly positive management tone at Corporate Day. Discipline and steadfastness in building niches. Fine-tuning existing capabilities. But no immediate catalysts. Maintain HOLD. No change to EPS or TP (12x FY15E P/E). Sector pick is DBS. Click here for report » ECONOMICS Malaysia Economics External Trade, July �14 Base effect & MYR gains kick in Export growth slumped while imports fell for the first time in 15 months in July 2014. Base effect is a key factor � especially for exports - given the rebound in 2H 2013 after the weak 1H 2013. In addition, there is also the translation loss from MYR gains versus USD. The numbers gel with our view that trade � and hence GDP � growth will taper in 2H 2014 after a robust 1H 2014. (FULL REPORT WILL BE OUT SOON)