Regional Daily, Maybank KE (2014-10-09)

Daily 09 October 2014 TOP VIEWS India Auto Sector | OVERWEIGHT India Banks Malaysia Aviation | NEUTRAL East West Banking Corp (EW PM) | Rating Change 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 10 quarters. Car sales have risen 9% YoY and two-wheeler sales up 16.7% YoY. Truck sales are still under pressure, down 14% YoY. Overall, we estimate earnings of automakers under our coverage rose 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. �X Within the sector, we prefer MSIL, TTMT and EXID. We have increased TP for MSIL by 15% to INR3,445, 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 rollover of EPS to FY16F. Sustained decline in fuel prices and cut in interest rates would be catalysts for further upside in earnings for the auto sector. Click here for report » India Banks Marketing takeaways Cautious optimism; BUY on dips We met 30 investors in Msia/SG/HK last week. Most shared our positive view on Indian banks. However, following the rally, investors prefer to wait for an opportune time to enter. Our discussions were focused on asset quality of banks, recent judgment by the Supreme Court of India on de-allocation of coal mines, interest rate cycle, and the new government�s policies to augment credit growth. Investors showed maximum interest in our Top Picks SBIN, AXSB and FB. AXSB found favour with all and investors evinced keen interest in FB. Click here for report » Malaysia Aviation Sector Update The year of living dangerously 2Q14 results season was a disappointment; sector core loss of MYR534m versus a profit of MYR31m in 2Q13. Industry has reached the bottom, but 2015 looms with cost challenges and other uncertainties. Maintain Neutral; both AirAsia and MAHB are trading close to fair value. AirAsia X is the sole SELL. Click here for report » East West Banking Corp (EW PM) Price weakness an opportunity to buy Share Price: PHP26.95 | Target Price: PHP31.80 (+18%) | MCap (USD): 679M | ADTV (USD): 0.3M Upgrade to BUY on 18% upside to our TP of PHP31.80, equivalent to 1.5x 2015F P/BV. Recent share price weakness likely due to dilution risk from possible CET1 capital-raising in FY15. Upside potential outweighs further downside risk. Click here for report » COMPANY NOTES Power Impulse Axiata Group (AXIATA MK) | Company Update Far East Horizon (3360 HK) | TP Revision Power Impulse Sector Update Utilities & renewables weekly Solar was the best performing sector (30 Sep to 7 Oct), up 2.8% WoW, while Chinese IPPs fell 2.4% WoW. Spot polysilicon price increased 0.58% to USD20.7/kg. Spot wafer price rose 1.8% WoW to USD0.87/piece. Daqin railway connecting Datong and Qinhuangdao will be under routine maintenance from 9 Oct for 16 days. (FULL REPORT WILL BE OUT SOON) Axiata Group (AXIATA MK) Showcasing its expertise Share Price: MYR7.03 | Target Price: MYR7.60 (+8%) | MCap (USD): 18.5B | ADTV (USD): 19M Celcom�s IT issues have been resolved, new product launches are in the pipeline. XL-Axis integration has progressed smoothly, and is expected to be completed by end-2014. Reiterate BUY with an unchanged TP of MYR7.60. Click here for report » Far East Horizon (3360 HK) More positive outlook guidance Share Price: HKD6.99 | Target Price: HKD8.00 (+14%) | MCap (USD): 3.0B | ADTV (USD): 5M Maintain BUY and raise TP to HKD8.00 from HKD7.15. Management more positive on NIM & asset quality outlook. Actively expanding hospital management profit contribution. Click here for report »