Regional Daily, Maybank KE (2014-11-13)

Daily 13 November 2014 TOP VIEWS Larsen & Toubro (LT IN) | TP revision Bumitama Agri (BAL SP) | Results review Megaworld Corp (MEG PM) | Results review Power Impulse | Sector update Larsen & Toubro (LT IN) Execution to pick up in FY16 Share Price: INR1,667 | Target Price: INR1,967 (+18%) | MCap (USD): 25.1B | ADTV (USD): 45M 1H order inflow growth of 14% YoY led to increase in backlog to INR2.1t (2.3x FY15F revenue).This provides strong earnings visibility for the next two years. Maintain BUY. Execution has suffered slightly in FY15 due to challenges in power, mining and hydrocarbon-related contracts. However, FY16F should see a pick-up as LT expects large infrastructure orders to contribute to revenue. We revise down our FY15 revenue/earnings forecast slightly by 4%/3% to factor is slower execution. Earnings should rise18% YoY in FY16, supported by pick-up in execution. Our new SOTP-based TP is INR1,967 (vs INR2,000 earlier). Click here for report » Bumitama Agri (BAL SP) Potential DPS upside Share Price: SGD1.21 | Target Price: SGD1.38(+15%) | MCap (USD): 1.7B | ADTV (USD): 0.8M 9M14 core PATMI above expectations. We raise FY14E earnings mainly on higher CPO ASP achieved. BAL mulling higher payouts as new-planting target slows on tougher RSPO requirements. Maintain BUY & SGD1.38 TP, at 16x FY15E EPS, implying just 0.7x PEG. Catalysts from 21% FFB output CAGR over 2013-16, among highest in industry and potential DPS upside. Maintain BUY and TP of SGD1.38, at 16x FY15E P/E, implying just 0.7x PEG. Catalyst is 21% FFB output CAGR over 2013-16 which is among the highest in the industry. Click here for report » Megaworld Corp (MEG PM) | Results review 9M14 results within expectations Share Price: PHP4.79 | Target Price: PHP7.09 (+48%) | MCap (USD): 3.4B | ADTV (USD): 5M Steady residential sales, strong growth in recurring incomes. Gross margins expanded to 44% due to project completion of higher-priced products and cost efficiency. Maintain BUY as GERI�s land bank will help the company grow. Click here for report » Power Impulse Utilities & renewables weekly Sector update Chinese IPP was the best performing sector (6 Nov to 12 Nov), up 2.2% WoW, while solar fell 4.7% WoW. Spot polysilicon price fell 0.58% WoW to USD20.68/kg. Spot wafer price was unchanged at USD0.88/piece. Qinhuangdao spot coal price (5500 kcal/kg, Shanxi Premium Blended) was up 2% WoW to CNY510/tonne. Click here for report » COMPANY NOTES The Link REIT (823 HK) | Results review Gas Malaysia (GMB MK) | Results review SIIC Environment (SIIC SP) | Results review United Envirotech (UENV SP) | Company Update Overseas Education Ltd (OEL SP) | Results review Bangkok Life Assurance (BLA TB) | Results review Sino-Thai Engineering & Construction (STEC TB) | Results review Land & Houses (LH TB) | Company update The Link REIT (823 HK) Results roughly in-line Share Price: HKD46.90 | Target Price: HKD43.60 (-7%) | MCap (USD): 13.9B | ADTV (USD): 30M Maintain HOLD, FY15 interim results roughly in-line. We estimate Link REIT to be yielding 3.81% FY15 distribution yield, a spread of 193bps above the 10-year HK EFN. We believe good news of addition of Link as a Hang Seng Index constituent has been priced in. Tenants� gross retail sales slowed down to only up 6.2% YoY. Interim DPU of HK89.56 cents (which includes a discretionary distribution) represents close to 50% of our FY15 estimate. Cap rates compression helped to bolster portfolio valuation, with weighted average cap rate down 45bps, especially compression seen in carparks and small-sized retail assets, reflecting trends in the macro Hong Kong market. Click here for report » Gas Malaysia (GMB MK) Earnings have peaked? Share Price: MYR3.50 | Target Price: MYR3.40 (-3%) | MCap (USD): 1.3B | ADTV (USD): 0.5M 9M14 net profit was in line at 80% of our full-year forecast, and 76% of consensus. We are expecting a sequentially weaker 4Q14; doubts remain over a 100% payout in 2014. Maintain HOLD, TP unchanged at MYR3.40. Click here for report » SIIC Environment (SIIC SP) Solid results, as expected Share Price: SGD0.17 | Target Price: SGD0.20 (+18%) | MCap (USD): 1.3B | ADTV (USD): 3M 3Q14 strength within expectations. Water treatment its main source of growth. YTD acquisitions slightly short of target but no worries. Ample M&A opportunities. Reiterate BUY. TP still at SGD0.20 or 30x FY15E EPS. Click here for report » United Envirotech (UENV SP) Takeover offer from CITIC Share Price: SGD1.52 | Target Price: SGD1.93 (+27%) | MCap (USD): 856M | ADTV (USD): 2M CITIC taking controlling stake in UENV at SGD1.65/share or 33.6x FY15E EPS, big premium over peers. Believe CITIC can take UENV to next level. Investors advised to hold out and ride its future growth. Maintain BUY & SGD1.93 TP, at 27x FY3/16E EPS. Click here for report » Overseas Education Ltd (OEL SP) Tuition fees still competitive Share Price: SGD0.92 | Target Price: SGD1.23 (+34%) | MCap (USD): 277M | ADTV (USD): 0.2M 3Q14 EPS shortfall from lower student enrolments. EPS cut by 12-20% for FY14E-16E. Dulwich and GEMS opened their first schools in Singapore in Aug-Sep 14. Worst of OEL�s student defections likely over. Maintain BUY with DCF TP down to SGD1.23 from SGD1.40, after EPS adjustments. Catalysts from higher tuition fees. Click here for report » Bangkok Life Assurance (BLA TB) 3Q earnings in the red Share Price: THB52.75 | Target Price: THB52.00 (-1%) | MCap (USD): 2.1B | ADTV (USD): 3M Net loss of THB881m in 3Q14 vs profit of THB1.1b in 3Q13 due to additional reserves of THB2.2b. Premium income fell 13% YoY after company slowed down sales of low-margin endowment products. Investment income remained healthy, growing 27% YoY to THB2.6b. Cut earnings by 74% and 21% in 2014-2015F after raising reserve-to-premium assumption. Keep HOLD, lower TP from THB60 to THB52, implying 17.5x 2015PER and 3.3x P/BV. Click here for report » Sino-Thai Engineering & Construction (STEC TB) 3Q14 in line Share Price: THB25.75 | Target Price: THB31.00 (+20%) | MCap (USD): 1.2B | ADTV (USD): 10M Maintain BUY with revised TP of THB31 (from THB28) after rolling over to FY15, still pegged to 5.0x P/BV 3Q14 net profit was in line with our estimate at THB332m (EPS THB0.22), down 18% QoQ and 14% YoY. Maintain positive outlook towards construction industry. STEC is one of Thailand�s top three contractors. Short-term catalyst is announcement of bidding winner of Green line extension in Dec-14. Click here for report » Land & Houses (LH TB) Limited upside; Prefer LPN & QH Share Price: THB9.85 | Target Price: THB10.50 (+7%) | MCap (USD): 3.3B | ADTV (USD): 6M Maintain HOLD, TP THB10.50 based on SOTP, implying 16.8x FY15F fully-diluted PER. Limited upside. Prefer LPN and QH 3Q14 net profit THB1.7b (EPS THB0.16), down 13% QoQ and 6% YoY, in line with our estimates. 9M14 earnings reached 73% of full-year forecast. Plan to launch two projects in 4Q14 worth THB5b. All projects are low-rise. 10M14 pre-sales were THB28.6b, up 3% YoY. This is 88% of its full-year target. Click here for report »