Regional Daily, Maybank KE (2014-10-08)

Daily 08 October 2014 TOP VIEWS Singapore Oil & Gas | NEUTRAL Regional Plantations | NEUTRAL Thailand Banks | OVERWEIGHT Vista Land & Lifescapes (VLL PM) | Rating Change Singapore Oil & Gas Sector Update Riding out oil-price volatility Sector�s correlation with Brent crude spiked in past month on jitters over slipping oil prices. Select companies exposed to opex cycle. Shallow waters more insulated. Remain Neutral on sector. Top BUYs Ezion, POSH, Nam Cheong & Vard. Click here for report » Regional Plantations Sector Update Who�s Who FR, BAL and IOI Corp are the most profitable upstream players in 2013 and by inference, the lower cost producers. IOI Corp, Sime, FR, KLK and BAL are least sensitive to CPO price changes. Maintain our 12M NEUTRAL view. CPO price likely to range bound till November before it punches higher in December. Click here for report » Thailand Banks Sector Update Resilient earnings despite weak loans Expect flat sector earnings in 3Q14F; healthy NIMs and good OPEX control to offset weak loan demand and fee income. Asset quality remains manageable with stable NPL ratios; expect stable provisions for mid to large size banks and lower provisions for banks with HP loans. Seasonal strength for loan demand in 4Q14 expected to support 5.5% loan growth this year. (FULL REPORT WILL BE OUT SOON) Vista Land & Lifescapes (VLL PM) Higher appraisal for Vista City Share Price: PHP6.05 | Target Price: PHP7.30 (+21%) | MCap (USD): 1.2B | ADTV (USD): 2M Upgrade to BUY from HOLD. Raise NAV to PHP9.16/sh and TP to PHP7.30 on higher land bank values and new developments in office and retail spaces. Marginal changes in 2014-2016 earnings. No near-term impact from build-up in recurring revenue but estimate it will reach PHP1b by 2019. Click here for report » COMPANY NOTES Hang Seng Bank (11 HK) | TP Revision India Auto Sector | OVERWEIGHT Axis REIT (AXRB MK) | TP Revision Venture Corporation (VMS SP) | Company Update Hang Seng Bank (11 HK) What if HSB doesn�t cut DPS? Share Price: HKD127.90 | Target Price: HKD98.00 (-23%) | MCap (USD): 31.5B | ADTV (USD): 17M Maintain SELL and cut TP to HKD98.00 from HKD101.35. HSBC may want HSB to keep DPS at HKD5.50. Cut loan growth forecast to 2.1% from 10.3%; CET1 CAR will rebound to 12.3% by end-Dec 2016. Click here for report » India Auto Sector Sector Update Solid 2Q; Recovery gains momentum Maintain OVERWEIGHT. 2QFY15 auto sector sales volumes are 14.7% higher YoY, making it the best quarter in the past ten quarters. Car sales have risen 9% YoY and two-wheeler sales were up 16.7% YoY. Truck sales are still under pressure and are down 14% YoY. Overall, we estimate earnings of auto sector companies under our coverage to rise 26% YoY for 2QFY15 (refer page 2 for details). We now expect the auto sector to grow at 10%+ for FY15 in volume terms vs. 8-10% earlier. We expect demand for cars and two-wheelers to gain momentum as the monsoon ended on a satisfactory note, supporting rural buoyancy. Further, better economic sentiment would reflect in upbeat sales. Within the sector, we prefer MSIL, TTMT and EXID. We have increased TP for MSIL by 15% to INR3445, for TTMT by 26% to INR700, and for EXID by 6% to INR206 (Refer table on page 3). Our TP revisions are driven by marginal earnings upgrade and roll over of EPS to FY16. Sustained decline in fuel prices and cut in interest rates would be catalysts for further upside in earnings for the auto sector. (FULL REPORT WILL BE OUT SOON) Axis REIT (AXRB MK) Buys industrial buildings in Johor Share Price: MYR3.64 | Target Price: MYR3.34 (-8%) | MCap (USD): 518M | ADTV (USD): 0.3M Latest industrial building acquisition in Iskandar Malaysia is value-enhancing, backed by long-term lease. Raise our FY15/16 earnings forecasts by 5.5%/5.4% to factor in this acquisition. Maintain HOLD; DCF-based TP is raised by 6% to MYR3.34. Click here for report » Venture Corporation (VMS SP) HP�s split a mild positive Share Price: SGD7.59 | Target Price: SGD9.50 (+25%) | MCap (USD): 1.6B | ADTV (USD): 2M Maintain BUY and SGD9.50 TP, based on 16x FY15E P/E based on peer average. HP splitting into two: Enterprise and Printers & PCs. Now minimal 5-6% of Venture�s revenue. Only orders business, not consumer, printers. Split could be a long-term positive. Allows HP�s printer/PC business to be more nimble, keep cash for own expansion. Click here for report » ECONOMICS Malaysia Economics External Trade, Aug 2014 �Improved� vs July 2014 Both exports and imports were better in Aug 2014 vs July 2014 But external trade growth slowed and trade surplus narrowed in Jul-Aug 2014 after the robust 1H 2014 Supporting our view that real GDP growth will taper in 2H 2014 on diminishing contribution from net external demand Click here for report »