Regional Daily, Maybank KE (2015-02-06)

Daily 06 February 2015 TOP VIEWS MediaTek (2454 TT) | Results preview Indonesia Consumer | OVERWEIGHT Malaysia Properties | NEUTRAL Guinness Anchor (GUIN MK) | Rating change MediaTek (2454 TT) Look at the big picture Share Price: TWD485.00 | Target Price: TWD600.00 (+24%) | MCap (USD): 24.3B | ADTV (USD): 75M Expect upcoming results to be solid and 1Q outlook to be in line with seasonal trend. Expect great momentum from 2Q onward with new wins, richer mix and market share gains. Share gains, enlarged addressable market and lower cost structure far outweigh pricing erosion. We raise 2015/16 EPS forecast by 10%/14%, placing us well ahead of Street. Click here for report » Indonesia Consumer Sunny days ahead; U/G OW Sector upgrade Upgrade to OVERWEIGHT from UNDERWEIGHT. Catalysts from mass market's faster recovery & stronger growth. Top picks GGRM, INDF & newly-initiated MYOR. Lower inflation, higher minimum wage & better welfare to free up wallet share, particularly in the lower end segment. Cheaper raw materials to provide cost relief. Expect more stable margins. Click here for report » Malaysia Properties More than just GST Sector update Weak buying sentiment and higher operating costs post-GST are the key issues for developers. Property stocks currently trade at 23-66% below our RNAV estimates, fairly reflecting their near-term subdued outlook. Maintain NEUTRAL on the sector; only BUY is SP Setia. Click here for report » Guinness Anchor (GUIN MK) Tiger leading the way; U/G BUY Share Price: MYR12.20 | Target Price: MYR13.80 (+13%) | MCap (USD): 1.0B | ADTV (USD): 0.3M 1HFY15 results are above expectations at 66%/64% of our and consensus original full-year forecasts. Strong 13% YoY 1HFY15 pretax profit growth on (i) recovery of MLM volumes, (ii) crackdown against contrabands, (iii) favourable pricing and brand mix, (iv) cost efficiencies. Upgrade to BUY with DCF-based TP of MYR13.80 (MYR13.20 previously). Dividend yield of ~5% provides support. Click here for report » COMPANY NOTES Regional Plantations | NEUTRAL Kansai Nerolac Paints (KNPL IN) | Rating change Punjab National Bank (PNB IN) | Results review Malaysia Marine & Heavy Engineering (MMHE MK) | Results review Inari Amertron (INRI MK) | Company update Public Bank (PBK MK) | Results review Robinsons Land Corp (RLC PM) | Results preview Hongkong Land (HKL SP) | Results preview Super Group (SUPER SP) | Results preview Advanced Info Service (ADVANC TB) | Results review Thai Airways International (THAI TB) | Company update Regional Plantations IDR4,000/liter biodiesel subsidy? Sector Indonesia parliament�s energy commission and government have approved a hike in biodiesel subsidy to IDR4,000/liter; but final approval needed from budget commission. If approved, the B10 initiative will be viable in Indonesia; positive for demand and CPO price. Wilmar (BUY) and First Resources (BUY) are direct beneficiaries of higher biodiesel subsidies in Indonesia. Click here for report » Kansai Nerolac Paints (KNPL IN) EPS growth priced in; D/G HOLD Share Price: INR2,379 | Target Price: INR2,437 (+2%) | MCap (USD): 2.1B | ADTV (USD): 1M Downgrade to HOLD from BUY as benign input costs & revival of discretionary spending likely priced in. Maintain TP at INR2,437, set at 26x FY17F PER. 3QFY15 EPS of INR12.20 in line, primarily aided by cheaper raw materials. 9MFY15 formed 78% of our FY15F. Maintain EPS CAGR forecast of 35% for FY15F-17F. Click here for report » Punjab National Bank (PNB IN) FY15 priced in, better FY16 Share Price: INR177 | Target Price: INR210 (+19%) | MCap (USD): 5.3B | ADTV (USD): 11M Maintain BUY but lower TP to INR210 from INR240 after cutting EPS by 13%. TP still at 0.9x FY16F P/BV. Catalysts from better asset quality & loan growth as economy improves. 3QFY15 below on jump in NPL provisioning. Impairments high in corporate book. Management focusing on secured retail loans. 0.7x FY16F P/BV valuations likely priced in FY15 weakness. Click here for report » Malaysia Marine & Heavy Engineering (MMHE MK) In line; challenging 2015 Share Price: MYR1.53 | Target Price: MYR1.60 (+5%) | MCap (USD): 687M | ADTV (USD): 1M 12M14 results met our expectation but above consensus; no dividend for FY14. Challenging outlook on replenishment risk; expect weaker YoY earnings. Reiterate HOLD and MYR1.60 TP, based on 2x EV/order backlog multiple, which also equates to 1x P/BV. Click here for report » Inari Amertron (INRI MK) All systems go! Share Price: MYR2.94 | Target Price: MYR3.95 (+34%) | MCap (USD): 583M | ADTV (USD): 2M New installed capacity to provide better scale, growth prospects and potentially new business proposition. Raise FY15/16/17 profit forecasts by 9%/3%/6% on (i) faster capacity expansion in RF division, (ii) stronger MYR/USD. Reiterate BUY with a higher TP of MYR3.95 (+7%) as we roll forward valuations to 16x CY16 PER (from 17x CY15 PER). Click here for report » Public Bank (PBK MK) As reliable as ever Share Price: MYR18.44 | Target Price: MYR19.20 (+4%) | MCap (USD): 19.9B | ADTV (USD): 20M FY14 net profit of MYR4.52b marginally above expectations. Key guidance is for loan growth of 9-10% and 8-10bp NIM compression in FY15. Earnings forecasts broadly maintained, TP of MYR19.20 unchanged (FY15 P/BV of 2.4x). Click here for report » Robinsons Land Corp (RLC PM) Strong 1QFY9/15 expected Share Price: PHP27.15 | Target Price: PHP29.00 (+7%) | MCap (USD): 2.5B | ADTV (USD): 2M Maintain BUY & PHP29 TP, set at 20% discount to NAV. Strong results in 1QFY9/15 to support 27% EPS growth this year. Five new malls, entry of new international retailers and stronger economy to boost lease revenue and stock price. Office occupancy improving from Cyberscape offices, lifting rental revenue. (Full report will be out soon) Hongkong Land (HKL SP) FY14 preview, MSCI inclusion? Share Price: USD7.85 | Target Price: USD8.56 (+9%) | MCap (USD): 18.5B | ADTV (USD): 10M FY14 results out on 5 Mar; we expect results to be in line. Watch for HKL�s HK office vacancies vs Oct�s high 6.8%, rental reversions & cap rates. Any MSCI HK inclusion in November would be a catalyst, going by Link REIT�s inclusion in HSI. Maintain BUY and TP. A good proxy to �re-centralization� theme in HK office space while supply is limited in Central. Trading at 31% discount to NAV and 0.7x 2015 P/BV. Click here for report » Super Group (SUPER SP) Needs to finesse success from distress Share Price: SGD1.19 | Target Price: SGD1.02 (-14%) | MCap (USD): 986M | ADTV (USD): 1M Early recovery priced in. 20% rally since our Nov upgrade takes valuations to 17.4x PER, close to 18.5x peer average. Near term, GST & currency potholes in Malaysia could pull back demand & margins. Maintain HOLD pending more situational clarity in Malaysia. Unchanged SGD1.02 TP, at its 15x five-year mean. Click here for report » Advanced Info Service (ADVANC TB) Positive momentum to continue Share Price: THB248.00 | Target Price: THB323.00 (+30%) | MCap (USD): 22.6B | ADTV (USD): 38M Reiterate BUY with DCF-based TP of THB323 (8.3% WACC and 2% LT growth). Key beneficiary of 900/1800MHz auction and also offers good dividend yield of 5.5% in FY15F. 4Q14F net profit was THB9.1b (EPS THB3.08), up 2% QoQ and 3% YoY. This is in line with our estimates. Stripping out oneoff extra item of THB664m, it beats our forecast by 9% due to faster-than-expected regulatory cost saving. Expect 1800MHz licenses to open for bidding in 3Q15 and 900Mhz three months after. This is a key share price catalyst for the stock. Click here for report » Thai Airways International (THAI TB) Same old story; SELL Share Price: THB14.60 | Target Price: THB12.00 (-18%) | MCap (USD): 977M | ADTV (USD): 3M Maintain SELL with TP of THB12.0, based on average value of 0.7x P/BV and 7x EV/EBITDAR. We do not believe THAI will create value in long-term horizon due to stiff competition. Transformation plan (2015-2017) is not attractive and same as previous rehabilitation plan in 2009-2010. There is no new initiative and positive surprise from this plan. Main downside risk of this plan is election in early 2016 could result in gov�t intervention that is inconsistent with the company�s plan. Click here for report » ECONOMICS Malaysia Economics: External Trade, Dec2014 Malaysia Economics: External Trade, Dec2014 Positive end to last year Economics Export and import growth picked up in the final month of 2014 Sustained trade surplus amid continued trend of crude oil and LNG surpluses offsetting deficit in refined petroleum products For 2015, expect +5.9% export growth (2014: +6.4%), +7.7% import growth (2014: +5.3%) and MYR75.8b trade surplus (2014: +MYR83.1b) Click here for report »