Regional Daily, Maybank KE (2014-10-28)

Daily 28 October 2014 TOP VIEWS Indonesia Strategy Biostime (1112 HK) | TP revision WHA Corp (WHA TB) | Company update KPIT Technologies (KPIT IN) | TP revision Indonesia Strategy Back to fundamentals Strategy Market will focus back on fundamentals as political events are largely behind us. We expect more miss than beat in 3Q14 earnings. We retain our expectation of a technical correction to 4500-4700 on JCI in the near term, but retain our structural positive view and index target of 6000 on JCI in 2015. (Full report will be out soon) Biostime (1112 HK) Multiple challenges escalating Share Price: HKD21.05 | Target Price: HKD17.04 (-19%) | MCap (USD): 1.6B | ADTV (USD): 8M Maintain SELL. New Street-low TP on 7-17% cut to FY14-16F EPS as competition rises. Sales efficiency decline at mature stores a structural concern despite on-track POS additions. Management lowered 2H14 sales target further. We believe this is due to MNCs� more aggressive push into supreme-tier products, maternity stores and e-commerce channels. We believe co�s undefined online strategy is a key risk, as it is only starting to look at setting up dedicated e-commerce team and product line to deal with this fast-growing channel. Click here for report » WHA Corp (WHA TB) WHA/HEMRAJ halted on takeover news Share Price: THB38.25 | Target Price: THB47.22 (+23%) | MCap (USD): 1.1B | ADTV (USD): 4M WHA/HEMRAJ halted: Stock exchange authority halted trading of both WHA and HEMRAJ on unconfirmed news that WHA is taking over HEMRAJ. We have a BUY on WHA (TP THB47), HOLD on HEMRAJ (TP THB4.8). WHA to leapfrog growth if it can acquire HEMRAJ. Capital increase is part of the funding as WHA�s CEO cited 25-30% of the registered capital. Assuming 30%, this would mean 289m shares and an injection of THB11b. Click here for report » KPIT Technologies (KPIT IN) Strong signs of growth revival Share Price: INR168 | Target Price: INR215 (+28%) | MCap (USD): 529M | ADTV (USD): 2M Maintain BUY with TP of INR215 (cut from INR245) based on 12xFY16FPER. KPIT remains our top mid-cap IT pick. 2QFY15 EPS of INR3.78, +39% QoQ and +4% YoY, exceeded our estimate by 15% and consensus by 17% on the back of big revenue beat (+8.5% QoQ) and lower effective tax rate. We factor in seasonal weakness in 3Q, in line with the company's guidance, and lower our revenue growth and EBITDA margin forecasts. We cut FY15/16F EPS by 13%/10% to INR14.2/17.9, 3%/9% above consensus. We are confident of recovery in growth in FY16, which should drive 19% EPS CAGR over FY14-17F. Click here for report » COMPANY NOTES Franshion Properties (817 HK) | Company visit NCB Holdings (NCB MK) | Results review Nestle Malaysia (NESZ MK) | Results review BDO Unibank Inc (BDO PM) Union Bank of the Philippines (UBP PM) | Results review Raffles Medical (RFMD SP) | Results review Franshion Properties (817 HK) Tier 1 city property tour takeaways Share Price: HKD1.88 | Target Price: HKD2.50 (+33%) | MCap (USD): 2.2B | ADTV (USD): 2M Keep BUY, TP HKD2.5 following reverse roadshow (Shanghai, Guangzhou) w/ about 15 sell-side equity and credit analysts. 4Q prop & land sales to pick up much; co aiming for CNY13b in 4Q (vs CNY11b in 9M14) on more launches & price cuts in some Tier-2 cities. Co�s Golden Wk prop sales up 7% YoY. We believe it can benefit from improvement in upgrade demand. Shanghai visit highlights some advantages of being SOE, with some advantages in getting prime land by the water. Low financing costs also helped co build some investment prop assets, which tend to drag down ROE due to high capex. Changsha land sales are a disappointment YTD, but expect 4 land parcels to be put up for sale over the next few weeks. Click here for report » NCB Holdings (NCB MK) Long road to recovery Share Price: MYR2.62 | Target Price: MYR2.25 (-14%) | MCap (USD): 376M | ADTV (USD): 0.0M 3Q14 results substantially below our and street�s estimates. Near-term anaemic earnings growth and unattractive DY. Maintain SELL with a lower DCF-derived TP of MYR2.25. Click here for report » Nestle Malaysia (NESZ MK) 3Q results broadly in line Share Price: MYR68.00 | Target Price: MYR63.60 (-6%) | MCap (USD): 4.9B | ADTV (USD): 1M 9M14 results were largely in line. 3Q14 topline down 4% YoY on lower export sales but bottomline up 9% YoY on (i) more favourable raw material costs, and (ii) stronger MYR against USD. Maintain HOLD with a lower TP of MYR63.60 (MYR64 previously. Click here for report » BDO Unibank Inc (BDO PM) Sustaining strong core lending Share Price: PHP95.95 | Target Price: PHP96.00 (+0%) | MCap (USD): 7.7B | ADTV (USD): 7M Keep HOLD on limited upside to our TP of PHP96, equivalent to 1.8x 2015F P/BV. 9M14 and 3Q14 earnings of PHP16.8b and PHP5.7b came within expectations. Preliminary numbers suggest continued strong core lending amid sustained easing in treasury. Click here for report » Union Bank of the Philippines (UBP PM) Better treasury, subdued lending Share Price: PHP117.90 | Target Price: PHP127.00 (+8%) | MCap (USD): 1.7B | ADTV (USD): 0.2M Maintain HOLD on under-researched stock and TP of PHP127, at 1.7x 2015F P/BV. 3Q14 net profit surged 60% YoY to PHP1.8b, 9M14 earnings were PHP5b. Broadly in line with our expectations, keep PHP7.2b in FY14. Click here for report » Raffles Medical (RFMD SP) Still-anaemic growth Share Price: SGD3.93 | Target Price: SGD3.93 (+0%) | MCap (USD): 1.7B | ADTV (USD): 0.9M 3Q14 in line. Decent YoY growth for lucrative hospital services, though still anaemic. No clarity on China expansion. New rivals in Singapore emerging and expanding. Maintain HOLD & DCF TP of SGD3.93 (WACC 8.1%, LTG 2%). Click here for report »