Regional Daily, Maybank KE (2014-10-21)

Daily 21 October 2014 TOP VIEWS Malaysia Strategy | NEUTRAL Vale Indonesia (INCO IJ) | Company Update Oberoi Realty (OBER IN) | Results Review Malaysia Strategy Strategy Values emerging Malaysian equities not spared from foreign selling; KLCI down 2.3% MTD. KLCI is nearing the low of its PER range of the past two years; current weakness is an opportunity to accumulate. No change to our 2,040 end-2015 KLCI index target; we still Overweight construction, oil & gas. Click here for report » Vale Indonesia (INCO IJ) CoW overhang removed Share Price: IDR3,670 | Target Price: IDR4,800 (+31%) | MCap (USD): 3.0B | ADTV (USD): 4M Maintain BUY, TP IDR4,800 (1.9x P/BV). Undemanding at 1.5x P/BV, with nickel deficit expected in 2015. CoW amendments to remove overhang, lower income tax rate and extend mine life by 20 years. Cut 2015E-16E EPS by 4-5% for higher royalties, but not yet incorporating any lower tax. Click here for report » Oberoi Realty (OBER IN) Sturdy project pipeline Share Price: INR218 | Target Price: INR338 (+55%) | MCap (USD): 1.2B | ADTV (USD): 1M Maintain BUY with Street-high TP of INR338. We forecast strong earnings growth forecast of 85% in FY16. FY16 growth will be supported by revenue recognition of ongoing projects (backlog of INR15b) and three project launches worth INR60b. FY15 EPS would decline 10% due to delay in Mulund and Worli project launches. However, we are enthused by the strong project pipeline and expect improvement in property demand following formation of BJP government in Maharashtra. (FULL REPORT WILL BE OUT SOON) COMPANY NOTES Mahindra Lifespace Developers (MLIFE IN) | Results Review Bank Danamon (BDMN IJ) | Company Update WCT Bhd (WCTHG MK) | Company Update Yinson Holdings (YNS MK) | Company Update DiGi.com (DIGI MK) | Results Review Bursa Malaysia (BURSA MK) | Results Review Axis REIT (AXRB MK) | Results Review Semirara Mining and Power Corp (SCC PM) | Transfer Coverage Silverlake Axis (SILV SP) | Company Update Thanachart Capital (TCAP TB) | Results Review Supalai PCL (SPALI TB) | Results Review Mahindra Lifespace Developers (MLIFE IN) Presales recovery boosts profit Share Price: INR532 | Target Price: INR680 (+28%) | MCap (USD): 351M | ADTV (USD): 0.5M 2Q presales rose 30% YoY, 70% QoQ as demand for MLIFE's ongoing projects in Nagpur, Pune and Hyderabad was strong. We expect this momentum to continue as company has lined up five project launches in next one year. 2Q profit increased 20% YoY and was slightly below estimate due to high tax expense. 2H forms 44% of full-year profit. We maintain our full-year profit growth forecast of 20%. In past three months, stock outperformed peers by 20%. We expect this performance to continue due to superior earnings growth vs peers. Stock is available at 40% discount to NAV. Maintain BUY with NAV-based TP of INR680. Click here for report » Bank Danamon (BDMN IJ) Second slash to EPS Share Price: IDR4,000 | Target Price: IDR3,500 (-13%) | MCap (USD): 3.2B | ADTV (USD): 1M Maintain SELL & IDR3,500 TP. Cut FY14E-15E EPS by 10% on lower-than-expected 9M14. Expansion faltering, including in SME business, supposedly to lead growth. NIM unlikely to rebound from recent low of 8.4% soon. Risk of higher provisions. Click here for report » WCT Bhd (WCTHG MK) Expanding existing landbank Share Price: MYR2.09 | Target Price: MYR2.28 (+9%) | MCap (USD): 698M | ADTV (USD): 0.5M Upbeat on its landbank expansion in Serendah that would enhance the development value of its existing land. Valuation is fair and would support LT property earnings. Earnings estimate unchanged. Maintain HOLD at MYR2.30 TP. Click here for report » Yinson Holdings (YNS MK) FPSO Adoon�s contract extended Share Price: MYR2.65 | Target Price: MYR3.03 (+14%) | MCap (USD): 0.8B | ADTV (USD): 2.1M This one-year extension up to Oct 2015, worth USD39m reflects a 9% improvement in dayrate. More positive newsflows in the pipeline - high probability of winning one new FPSO contract in 2014. MYR3.03 TP under review pending outcome of the Ghana tender, due soon. We are positive and maintain our BUY call. Click here for report » DiGi.com (DIGI MK) Slowing top-line growth Share Price: MYR5.93 | Target Price: MYR5.60 (-6%) | MCap (USD): 14.0B | ADTV (USD): 13M 9M14 EBITDA and net profit were in line with ours and consensus expectation. Revenue growth is slowing, but Digi�s revenue growth would likely still outperform cellular peers in 3Q14. Maintain HOLD, TP unchanged at MYR5.60. Click here for report » Bursa Malaysia (BURSA MK) Within expectations Share Price: MYR8.00 | Target Price: MYR8.00 (+0%) | MCap (USD): 1.3B | ADTV (USD): 1M 9M14 results meet expectations. No change to our earnings forecasts and MYR8.00 TP. Maintain HOLD for its capital management potential. Click here for report » Axis REIT (AXRB MK) Earnings on track Share Price: MYR3.65 | Target Price: MYR3.34 (-8%) | MCap (USD): 514M | ADTV (USD): 0.3M 9M14 core net profit of MYR62m (-2% YoY) was within our expectation but below consensus. Placement of new units is underway to fund its MYR434m worth of new acquisitions in Shah Alam and Nusajaya Maintain earnings forecasts, DCF-based TP of MYR3.34 and HOLD rating. Click here for report » Semirara Mining and Power Corp (SCC PM) Unsteady power offset by coal Share Price: PHP118.50 | Target Price: PHP105.90 (-11%) | MCap (USD): 940M | ADTV (USD): 1M Transfer coverage to Ramon Adviento. Maintain HOLD as power expansion is factored into NAV. Unsteady power business lowers capacity factor and bottom line, partially offset by robust coal exports. (FULL REPORT WILL BE OUT SOON) Silverlake Axis (SILV SP) Positive echoes from banks Share Price: SGD1.27 | Target Price: SGD1.40 (+10%) | MCap (USD): 2.2B | ADTV (USD): 2M Reiterate BUY & DCF-based SGD1.40 TP. Temenos survey flags most bullish IT spending in recent years. Asian banks most optimistic. Core banking upgrades a top priority. Catalysts from further customer traction and earnings deliveries amid market turmoil. Click here for report » Thanachart Capital (TCAP TB) 3Q14 results missed our forecast Share Price: THB35.50 | Target Price: THB37.00 (+4%) | MCap (USD): 1.4B | ADTV (USD): 4M Maintain HOLD and TP of THB37, implying 7.5x 2015 PER, 0.9x P/BV and 11.8% ROE. Prefer TISCO among small banks. 3Q14 earnings fell 3% QoQ and 28% YoY to THB1.2b (EPS:THB0.94), below our and Street estimates by 10% and 12%, on lower-than-expected non-interest income. Better asset quality with lower NPL formation; 9M14 net profit accounted for 68% of our full-year forecast. (FULL REPORT WILL BE OUT SOON) Supalai PCL (SPALI TB) 3Q14 results missed our forecast Share Price: THB35.50 | Target Price: THB37.00 (+4%) | MCap (USD): 1.4B | ADTV (USD): 4M Maintain HOLD and THB28.5 TP pegged to 9.7x FY15 PER; expect no positive surprise from our estimate and limited upside to our TP. Prefer LPN (TP THB27) and QH (TP THB6.0). Expect solid 3Q14F earnings at THB1.4b (EPS THB0.82), up 167% QoQ, 303% YoY, driven mainly by huge condos transfer. Downside risk if recognition of Supalai Wellington starting in Dec 2014 is lower than expected - estimated at THB950m. Revenue could miss our and mgt FY14 target of THB19.6b and THB20b. Click here for report »