Regional Daily, Maybank KE (2014-10-31)

Daily 31 October 2014 TOP VIEWS ASM Pacific Technology (522 HK) | Rating change Agricultural Bank of China (1288 HK) | Rating change Philippines Property | OVERWEIGHT Bumi Serpong Damai (BSDE IJ) | Results review ASM Pacific Technology (522 HK) Major comeback; U/G to BUY Share Price: HKD82.45 | Target Price: HKD92.00 (+12%) | MCap (USD): 4.3B | ADTV (USD): 6M Upgrade to BUY from HOLD with revised TP of HKD92 (from HKD72) as ASMP is benefiting from success of restructuring, M&A and operating leverage. Expect earnings, ROE and cash dividend to improve steadily. 3Q14 results well ahead of forecasts and best since 2010 on enlarged TAM, strong cycle and operating leverage. Click here for report » Agricultural Bank of China (1288 HK) Rev. growth losing steam; D/G HOLD Share Price: HKD3.57 | Target Price: HKD3.70 (+4%) | MCap (USD):14.2B | ADTV (USD): 48M D/G to HOLD and lower TP to HKD3.70. Cut EPS forecasts. Lower NIM and net fees forecasts. High provision coverage a key positive. Click here for report » Philippines Property No clear evidence of bubble Sector update Maintain OVERWEIGHT on sector with Top Picks ALI, SMPH, MEG and FLI. Central bank governor confirmed our thesis there are no curbs introduced for property lending. Share prices have only slightly recovered from the sell-off which continues to be an opportunity to accumulate. Click here for report » Bumi Serpong Damai (BSDE IJ) Margin up again, topping estimates Share Price: IDR1,565 | Target Price: IDR1,800 (+15%) | MCap (USD): 2.3B | ADTV (USD): 2M 9M14 net profit of IDR3.2t (+49% YoY), achieving 83% of our upgraded FY14F earnings and 105% of consensus. We raise our FY14-16 gross margin forecast to 74% from 65-68%. EBIT margin rose to 50% in 3Q14 (46% in 2Q14) due to sale of higher margin residential projects and booking of more land sales. We expect this high margin level to be sustained. Maintain BUY with unchanged TP of IDR1,800 (42% discount to RNAV of IDR3,084). Top Pick in residential property sector. Click here for report » COMPANY NOTES Bank of China (3988 HK) | TP revision Matahari Department Store (LPPF IJ) | Results review Astra International (ASII IJ) | Results review Tambang Batubara Bukit Asam (PTBA IJ) | Results review Pavilion REIT (PREIT MK) | Results review Kossan Rubber Industries (KRI MK) | Company update Rubber Gloves | OVERWEIGHT OCBC Bank (OCBC SP) | Results Review United Overseas Bank (UOB SP) | Results review Minor International PCL (MINT TB) | Results Preview Italian-Thai Development (ITD TB) | Company visit Bank of China (3988 HK) Outlook remains cautiously positive Share Price: HKD3.68 | Target Price: HKD4.60 (+25%) | MCap (USD): 39.7B | ADTV (USD): 130M Maintain EPS forecast; raise TP on rolling over to Dec15 P/BV. Minimize NIM pressure & explore new non-interest income. Signs of improving asset quality & CET1 CAR. Keep BUY. Click here for report » Matahari Department Store (LPPF IJ) 9M14 earnings slightly below Share Price: IDR15,150 | Target Price: IDR12,000 (-21%) | MCap (USD): 3.7B | ADTV (USD): 6M 9M14 net earnings +18% YoY to IDR1.1t, slightly below our estimates (which is below Bloomberg consensus). Gross revenue +13% YoY to IDR11t, on the back of 11% SSSG. EBIT margin expanded 50bps to 14.8% vs 9M13. Retain HOLD as we believe the upside potential has been priced in at LPPF current valuation. TP under review. Click here for report » Astra International (ASII IJ) Diminishing growth momentum Share Price: IDR6,875 | Target Price: IDR5,500 (-20%) | MCap (USD): 23.0B | ADTV (USD): 16M Maintain SELL as 9M14 earnings are at lower end of consensus and our expectations. 9M14 net profit was IDR14.49t (+11.3% YoY), only accounting for 71%-73% of consensus and our FY14 forecast. Earnings momentum was weak as net profit in 3Q14 was down 8.1% QoQ and only +0.7% YoY. Competition continued to pressure profit margin in automotive division that accounted for 41% of its profit in 9M14 (down from 51% in 9M13). Click here for report » Tambang Batubara Bukit Asam (PTBA IJ) 9M14 still strong Share Price: IDR12,550 | Target Price: IDR15,000 (+20%) | MCap (USD): 2.4B | ADTV (USD): 3M Maintain BUY with railway improvements & resilient domestic business as catalysts. DCF TP still at IDR15,000. 3Q EPS down QoQ but 9M still strong, beating our forecast on higher-than-expected ASPs. 3Q railway volume another quarterly record. Click here for report » Pavilion REIT (PREIT MK) Earnings uptrend intact Share Price: MYR1.48 | Target Price: MYR1.52 (+3%) | MCap (USD): 1.4B | ADTV (USD): 0.3M 9M14 core net profit of MYR175m (+10% YoY) was in line. We like PavREIT for its superior asset quality. Maintain earnings forecasts, DCF-based TP of MYR1.52. BUY. Click here for report » Kossan Rubber Industries (KRI MK) A safe haven Share Price: MYR4.63 | Target Price: MYR5.00 (+8%) | MCap (USD): 898M | ADTV (USD): 1M Ebola-led orders limited to just a small fraction of business for now. A defensive, high-growth stock with DY of 2+%. BUY with an unchanged TP of MYR5.00 (17x FY15 PER). Click here for report » Rubber Gloves Still a defensive sector Sector update Mild 2.3% hike in gas price has limited impact to bottomlines. Players are raising efficiency to counter future energy hikes. Maintain Overweight with Kossan as our top pick. Click here for report » OCBC Bank (OCBC SP) Operating trends sustained Share Price: SGD9.69 | Target Price: SGD10.10 (+4%) | MCap (USD): 26.6B | ADTV (USD): 37M No surprises. NIM weaker but expected. Credit quality strong. Ample 80.2% SGD LDR, with decent loan growth. The extraction of synergies from WHB remains an uncertainty. Maintain HOLD & SGD10.10 TP, at 1.24x FY15E P/BV. Top sector pick DBS. Click here for report » United Overseas Bank (UOB SP) Trends turning positive Share Price: SGD22.46 | Target Price: SGD25.30 (+13%) | MCap (USD): 28.5B | ADTV (USD): 32M 3Q beat expectations, from fees and trading & investment income. Stable NIM & credit quality. Improving SGD funding profile. Stronger-than-expected loan growth of 11.0% YoY. Maintain HOLD. EPS and TP at 12x FY15E P/E unchanged. Top sector pick: DBS. Click here for report » Minor International PCL (MINT TB) Expect single-digit growth in 3Q Share Price: THB34.50 | Target Price: THB40.00 (+16%) | MCap (USD): 4.3B | ADTV (USD): 9M Occupancy rate in 3Q14 was 66% (vs 69% in 3Q13, 60% in 2Q14) and ARR rose 4%. RevPAR fell 1% YoY and 3% QoQ. Total system sales growth up 14% and SSSG increased 1.2% Expect net profit to grow 5% YoY and 21% QoQ thanks to strong food business and 30bps EBITDA margin expansion. Maintain BUY on hotel bus. recovery in 4Q14 and 2015. Food bus. should continue to grow in 2015. DCF-based THB40 TP implies 27.8x PER, 4.8x P/BV, and 1x PEG for FY15F. Click here for report » Italian-Thai Development (ITD TB) Awakening tiger Share Price: THB5.65 | Target Price: THB7.00 (+24%) | MCap (USD): 846M | ADTV (USD): 18M Maintain BUY raised TP to THB7.0 after rolled-over valuation base to FY15 pegged to 2.7x PBV in FY15F Multiple catalysts in FY15 from (i) listing Potash mining in Singapore (ii) progress on Dawei phase I and (iii) bidding of infrastructure projects Limited borrowing capacity given high net D/E at 3.0x as of 2Q14; potentially lead to do capital-raising to fund the investments (Full report will be out soon) ECONOMICS US FOMC US FOMC FFR guessing-game as QE Taper ends Economics Fed announced the completion of QE Taper. Maintain FFR at 0.00%-0.25% and rolling over of purchased assets. Uncertain timing and magnitude of FFR hike amid significant divergence between official guidance and market expectations. We expect 50-75bps hike next year, beginning Sep 2015. 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