Regional Daily, Maybank KE (2014-03-24)

Daily

24 March 2014

TOP VIEWS VTECH Holdings (303 HK) | Rating change Travellers International Hotel Group (RWM PM) | Results review Sarawak Oil Palms (SOP MK) | Company update Timah (TINS IJ) | Company update VTECH Holdings (303 HK) Stable & steady � good virtual; BUY Share Price: HKD96.05 | Target Price: HKD120.00(+25%) | MCap (USD): 3.1B | ADTV (USD): 4M Upgrade to BUY from HOLD with revised TP of HKD120 as we transfer coverage to Warren Lau. We expect total returns of 25-30% in the next 12-15 months. Profitability likely to improve on richer product mix, lower material costs, depreciation of RMB and improved efficiency. Stable earnings growth and maximum pay-out ratio lead to attractive and sustainable cash dividend. The �40% ROE places VTECH among the best regionally if not globally. Click here for report » Travellers International Hotel Group (RWM PM) Looking forward to a better FY14 Share Price: PHP8.90 | Target Price: PHP12.74 (+43%) | MCap (USD): 3.1B | ADTV (USD): 5M FY13 results disappoint due to low VIP hold rate. Hold adjusted EBITDA would have been 56% higher! Visitation to RWM continues to grow. Substantially more tables and slots will drive gaming volumes going forward. Poor results likely reflected in current share price already. Maintain BUY with a trimmed TP of PHP12.73 (-2%). (FULL NOTE TO BE OUT SOON) Sarawak Oil Palms (SOP MK) Under-researched, undervalued Share Price: MYR6.50 | Target Price: MYR6.90 (+6%) | MCap (USD): 0.9B| ADTV (USD): 0.5M We recently hosted SOP on non-deal roadshows in KL and Singapore, and met over 20 fund managers. We expect SOP to deliver 12% 2013-16 CAGR in FFB output, its young palms to drive near-term earnings. Maintain BUY with TP of MYR6.90 (+10sen) on unchanged 15x 2015 PER; FY14-16 core net profit raised by 0.6%-1.8%. Click here for report » Timah (TINS IJ) The important variable Share Price: IDR1,765 | Target Price: IDR2,500(+42%) | MCap (USD): 776M | ADTV (USD): 2M Maintain Buy on positive industry developments. Our TP of IDR2,500 suggests 2.1x 2015F BV, in line with its historic mean. The stock is trading at undemanding valuations. Higher tin prices, driven by more supply discipline from Indonesia, would be the main catalyst for the stock. Click here for report » COMPANY NOTES Ebbs & Flows Jasa Marga (JSMR IJ) | Company update Indofood CBP (ICBP IJ) | Results review MISC Bhd (MISC MK) | Company update Courts Asia (COURTS SP) | Rating chnge Ebbs & Flows China outflows intensified Strategy Global equity fund flows increased to USD9.2b for the week ended Mar 19, the sixth consecutive week of inflows. This was mainly driven by sticky ETFs which attracted USD10.2b of inflows, while non-ETF equities reported outflows of USD1.0b - even despite uncertainties surrounding Crimea's referendum. Fund outflows from Asia ex-Japan increased by USD1.5b, almost doubled that of the previous week. Tracking NAV changes on week-on-week basis, we observe that fund redemptions in China remained unabated as well as Malaysia. Conversely, we saw accumulation into Indian equities for the first time in 18 weeks. On a four-week cumulative basis, Malaysia Consumer Discretionary was the worst performing sector in Malaysia in terms of net flows as percentage of AUM (Fig 23). Click here for report » Jasa Marga (JSMR IJ) Back on course Share Price: IDR5,825 | Target Price: IDR7,000(+20%) | MCap (USD): 3.5B | ADTV (USD): 4M Maintain BUY with new TP of IDR7,000. Bad news fully priced in. We continue to like JSMR as disciplined earnings growth set to resume. FY14F earnings poised to accelerate 24% YoY on positive impact from last year�s tariff adjustment and additional tariff adjustment on two routes this year. Recent commencement of two new routes and upcoming six routes with total length of 46km will underpin traffic volume growth of 7% YoY in 2014F. Click here for report » Indofood CBP (ICBP IJ) Margins contraction on higher costs Share Price: IDR10,800 | Target Price: IDR12,000(+11%) | MCap (USD): 5.5B | ADTV (USD): 3M ICBP's FY13 revenue of IDR25t (+16.3% YoY) in line with our estimates, but earnings of IDR2.2t (+2.1% YoY) below our estimates. Margins under pressure from higher salary and A&P costs. Beverages book IDR219b of sales but negative EBIT. Maintain HOLD with TP of IDR12,000. Click here for report » MISC Bhd (MISC MK) Sells logistics ops to Utusan Printcorp Share Price: MYR7.01 | Target Price: MYR7.20 (+3%) | MCap (USD): 9.5B | ADTV (USD): 3.2M The MYR250m sale implies 1x BV and 15x 2013 PER. Marginal impact to earnings. This non-core business accounted for sub-2% to Group�s pretax profit in 2013. Maintain Buy and MYR7.20 SOP target price. Click here for report » Courts Asia (COURTS SP) Value emerging; upgrade to HOLD Share Price: SGD0.57 | Target Price: SGD0.60(+5%) | MCap (USD): 250M | ADTV (USD): 0.3M Courts Singapore turns 40 and intends to push ahead with brand building and expansion despite the retail slowdown. Stock has underperformed since our SELL call in Dec 2013. But value is starting to emerge, with its credit book value almost equivalent to its market cap. We think credit sales in Malaysia are picking up again and margins will improve. Upgrade to HOLD. Click here for report » ECONOMICS Malaysia CPI, Feb 2014 Malaysia CPI, Feb 2014 Economics Upward pressure continues Inflation continues to forge ahead to +3.5% YoY rise in Feb 2014 (Jan 2014: +3.4% YoY). Our core inflation (excluding the heavily-subsidised components of CPI) moved up +1.9% YoY (Jan 2014: +1.7% YoY). No change in our full-year inflation rate forecast of 3.5%, while BNM revised upward the official forecast to 3.0%-4.0% (2.0%-3.0% previously). Click here for report »     Click here for full Regional Daily report »