Regional Daily, Maybank KE (2015-02-23)

Daily 23 February 2015 TOP VIEWS ASM Pacific Technology (522 HK) | Results Preview Philippines Strategy | OVERWEIGHT Singapore Banks | OVERWEIGHT ASM Pacific Technology (522 HK) Better days ahead Share Price: HKD76.25 | Target Price: HKD92.00 (+21%) | MCap (USD): 3.9B | ADTV (USD): 6M 4Q14/FY14 results out 5 Mar. Expect 4Q numbers to be solid - up 9x YoY & 2014 to be first YoY growth in earnings since 2010 following three years of restructuring & M&A. Expanded total addressable market (up 2x from 2010) and diversifications in end markets and customers will grow future earnings, already seen in early results in 2H14. Increase in productivity, adoption of production flexibility and softer Asian currencies likely to enhance profitability. Click here for report » Philippines Strategy Strategy Sprinting to new records The PSEi made 15 new record highs YTD, Friday being the last one at 7,825. Maintain OVERWEIGHT as year-end index target raised to 8,300 from 8,000, equivalent to 20x market PER, same as last year. We remain optimistic on the economy, with 4Q14 GDP data showing encouraging indicators on public spending. Along with lower oil prices, expect positive impact on earnings. Bias for upgrades borne out by changes to target prices YTD, with 16 raised and three lowered. Blended return on model portfolios YTD is 9.1%, outperforming PSEi by 86bps. Click here for report » Singapore Banks Sector Update Trends intact, despite weak finish DBS�s operations the best in 4Q14. Banks� asset quality still sound. Liquidity profiles good. Slowing loan growth their only soft spot. Adjust EPS +2.2%/-3.3% after housekeeping changes & also TPs. OCBC now valued on PER from P/BV. Maintain OVERWEIGHT. Catalysts from higher interest rates. DBS our top pick, followed by UOB. Still cautious on OCBC. Click here for report » COMPANY NOTES HDFC Bank (HDFCB IN) | Results Review Nestl� India (NEST IN) | TP Revision Kalbe Farma (KLBF IJ) | Results Review Wijaya Karya (WIKA IJ) | Company Update AirAsia Bhd (AIRA MK) | Results Preview CIMB Group Holdings (CIMB MK) | Company Update Malaysia Automotive | NEUTRAL Petronas Chemicals (PCHEM MK) | Results Review Globe Telecom (GLO PM) | Transfer Coverage Bangkok Bank (BBL TB) | Company Update Pruksa Real Estate (PS TB) | Company Update HDFC Bank (HDFCB IN) Well capitalised to grow Share Price: INR1,067 | Target Price: INR1,075 (+1%) | MCap (USD): 41.4B | ADTV (USD): 32M Maintain HOLD and raise TP to INR1075 based on 3.8x FY16F P/BV. HDFCB delivered yet another quarter of stable performance across parameters. With recent equity infusion of INR98b, HDFCB is well placed in the next up-cycle of economy. We raise our BV for FY16F by 11% to factor in the capital infusion. We like HDFCB for its consistent earnings delivery across cycles. Our only issue is with valuations, which at 3.8x FY16F P/BV leave limited room for expansion. Click here for report » Nestl� India (NEST IN) Domestic pick-up aids earnings Share Price: INR7,159 | Target Price: INR5,420 (-24%) | MCap (USD): 11.1B | ADTV (USD): 3M Maintain SELL but raise TP to INR5420 from INR4990 in view of pick-up in sales growth and greater fall in raw material cost. 4QFY14 and FY14 EPS of INR35.8 and INR126.5 were in line with our expectations. However the improvement in sales growth and fall in raw material cost were higher than we expected. Fine tune FY15F EPS in view of better-than-expected sales growth and lower raw material cost. But raise FY16F EPS forecast by 9%. Primary catalysts: 1) pick-up in sales growth led by urban recovery and 2) drop in prices of key raw material. Click here for report » Kalbe Farma (KLBF IJ) FY14 results in line Share Price: IDR1,810 | Target Price: IDR2,200 (+22%) | MCap (USD): 6.6B | ADTV (USD): 5M Net earnings IDR2.1t (+7% YoY) in line with our estimate (98% of our FY14 forecast). Revenue +9% YoY, driven by pharmaceutical and consumer businesses, while revenue from distribution business fell. EBIT margin retained at 15.9% on ASP increase and change in business mix. Click here for report » Wijaya Karya (WIKA IJ) Weak 1M15; Plenty of time to catch up Share Price: IDR3,635 | Target Price: IDR3,800 (+5%) | MCap (USD): 1.7B | ADTV (USD): 5M Maintain HOLD on limited upside. TP of IDR3,800 is pegged at FY15 PER of 31x. 1M15 new contract achievement of IDR1.1t was lower than IDR2.5t in 1M14, but plenty of room to catch up given recent budget passed. Management raised 2015 new contract target by 10% to IDR33t vs IDR27t in our forecast. Click here for report » AirAsia Bhd (AIRA MK) 4Q14 earnings to fall short? Share Price: MYR2.64 | Target Price: MYR2.94 (+11%) | MCap (USD): 2.0B | ADTV (USD): 9M 4Q14 operating statistics below expectation, our FY14 core net profit forecast lowered by 6%. AirAsia will sell its 25% stake in AAE Travel for a net disposal gain of USD78.8m (MYR279.6m) which equates to 10sen/shr. Maintain BUY with a reduced TP of MYR2.94 (from MYR3.00) after imputing lower associate contribution from AAE Travel. Click here for report » CIMB Group Holdings (CIMB MK) Clarifies coal sector exposure Share Price: MYR5.90 | Target Price: MYR5.70 (-3%) | MCap (USD): 13.7B | ADTV (USD): 15M 34% of CIMB Niaga�s coal-related loans are non-performing (not 68%); LLC higher at 54% (vs initial guidance of 20%). Our forecasts for CIMB Niaga maintained � implying a 4% cut to our FY15 net profit forecast for CIMB Group. HOLD and MYR5.70 TP for CIMB Group maintained pending results on 27 Feb. Click here for report » Malaysia Automotive Sector Update Slow start post year-end party Jan 2015 TIV fell 22% MoM to 50.6k units from a high base in Dec 2014 due to year-end sales campaigns. Our 2015 TIV forecast of 660k units (-1% YoY) is unchanged, having considered weaker consumer sentiment ahead of GST. Maintain Neutral with no near-term re-rating catalyst just yet. BUYs are MBM and BAuto. HOLD UMWH and TCM. Click here for report » Petronas Chemicals (PCHEM MK) Final FY14 disappoints Share Price: MYR5.39 | Target Price: MYR5.35 (-1%) | MCap (USD): 11.9B | ADTV (USD): 4M FY14 core PATAMI of MYR2,465m (-21.6% YoY) was below expectations. ASPs fell significantly, in tandem with falling crude oil prices. Maintain HOLD. No change to target price of MYR5.35 pending analyst briefing later today. Click here for report » Globe Telecom (GLO PM) Lower depreciation in 2014, subs grow Share Price: PHP1,915.00 | Target Price: PHP1,964.00 (+3%) | MCap (USD): 5.7B | ADTV (USD): 2M Transfer coverage to Michael Bengson. Maintain HOLD & PHP1,964 TP. FY2014 core net income grew 25% as depreciation expense declined 34%. Subscriber growth was stronger than expected. Service revenue could potentially grow by a high single-digit rate in 2015. Click here for report » Bangkok Bank (BBL TB) Conservative guidance Share Price: THB190.00 | Target Price: THB230.00 (+21%) | MCap (USD): 11.1B | ADTV (USD): 27M BBL targets FY15 loan growth of 3-5% based on 3-4% GDP growth driven by SMEs, housing and overseas lending. Bank has bullish outlook on cross-border trading in CLMV countries but remain cautious on the slow government spending and weak consumption in provincial areas. Expect earnings to grow 8% this year. Maintain BUY and THB230 TP, implying 1.2x 2015 P/BV and 12% ROE. Click here for report » Pruksa Real Estate (PS TB) 4Q14 within expectations Share Price: THB31.75 | Target Price: THB37.50 (+18%) | MCap (USD): 2.2B | ADTV (USD): 4M Maintain BUY with TP of THB37.5 based on 11.5x FY15F PER (+0.5SD over seven-year mean); attractive valuation at 9.8x FY15F PER with presales catalyst at 20% YoY. 4Q14 net profit was in line with our and consensus estimates at THB1.9b (EPS THB0.84), up 2% QoQ but down 17% YoY. Announced dividend payment of THB1/sh. XD on 11 Mar. Backlog was THB34b where THB22.8b would be recognized in FY15 (48% of our FY15 revenue forecast). Click here for report » ECONOMICS Malaysia Economics Malaysia CPI, Jan 2015 Temporary disinflation� Inflation rate dropped sharply in Jan 2015 to +1.0% YoY (Dec 2014: +2.7% YoY) mainly due to lower transport costs as crude oil price plunge led to cheaper fuel prices. Adjust our 2015 inflation forecast to 3.0%-4.0% from 4.0%. Amid volatility and mixed trends in key factors influencing inflation, namely volatility in crude oil price and MYR; application of incentive-based regulation (IBR) on electricity tariff; still uncertain price impact of GST. Click here for report »