Regional Daily, Maybank KE (2014-04-02)

Daily 02 April 2014 TOP VIEWS Invest Asean 2014 | Ideas Book New Ocean Energy (342 HK) | Company Update Angang Steel (347 HK) | Company Update INVEST ASEAN 2014 IDEAS BOOK Conference guide More than 70 of ASEAN's most promising companies and the region's most influential thought leaders are participating in this event. Our goal is to fuel dialogue and debate on ASEAN's competitiveness and the investment opportunities that it presents as ASEAN strives for regional economic integration by 2015. Click here for report » New Ocean Energy (342 HK) Metamorphosis: A pause to refresh Share Price: HKD6.00 | Target Price: HKD8.88 (+48%) | MCap (USD): 1.1B | ADTV: USD6M Reiterate BUY, HKD8.88 TP. Stock pulled back 30% since recent high, but we believe LT story improving by the day. Revise 2015 earnings by 11%, while 2014 numbers stay put. Trades at 8.0x 2014E earnings versus target of 12.5x. Entry to Auto LNG will prompt NOE�s long-term rerating. Investors yet to regain full confidence since news allegation in early March. Also, rising concerns about sustainability of its margin, given significance of forex gain in 2013, and slower ramp up of HK retail LPG sales in 2014. Numbers speak louder than words, and interim results are the next catalyst. Transformation underway. Management announced new JVs with multiple intercity transportation companies in Guangdong, kick-starting entry into Auto LNG. We believe NOE will continue to re-rate, as company delivers. Click here for report » Angang Steel (347 HK) No changes; Sell into any rallies Share Price: HKD4.78 | Target Price: HKD4.00 (-16%) | MCap (USD): 4.5B | ADTV: USD4M Our estimates are unchanged, which we revised in January after Angang pre-announced a profit for 2013, the first in three years, aided by asset sales and accounting changes. We estimate a slight improvement in 2014 EPS of CNY0.01 YoY (+10.8%), with a further increase in 2015 due to lower raw materials costs, partially offset by lower selling prices. Our TP of HKD4 (unchanged) assumes 0.5x PBR, which appears fair based on the low ROE, rising debt/payable levels, and structurally weak steel prices we forecast ahead. Click here for report » COMPANY NOTES China Property | OVERWEIGHT Puravankara Projects (PVKP IN) | Company Visit Indofood Sukses Makmur (INDF IJ) | Transfer Coverage Malaysia Banking Sector | NEUTRAL SapuraKencana Petroleum (SAKP MK) | Company Update Energy Development Corp (EDC PM) | TP Revision Property Sector China Property 1Q14 Sales League Table Most developers expect 2Q14 sales to exceed 1Q, with June being the peak project launch period. We expect 2Q sales to be 15-20% higher QoQ, partly driven by inventory clearing, flexible pricing and potential loosening in weak property markets. Maintain Overweight on the sector. March contract sales � Cifi, GZ R&F, Shimao and Yuexiu should achieve highest MoM rise, while KWG and CRL should have weaker sales, implied by CRIC data. Sino-Ocean�s sales also look lacklustre. Over 80% of developers we track will show MoM rise in contract sales in March, using CRIC data. 1Q14 average lock-in vs management contract sales targets is 19%, using CRIC data, lower than last year�s 25% by end-March. Again, the listed universe outperforms China property market and gained market share. Click here for report » Puravankara Projects (PVKP IN) Solid visibility for FY15 Share Price: INR67 | Target Price: INR82(+22%) | MCap (USD): 202M | ADTV (USD): 0.0M Achieves presales guidance of INR15b for FY14 (+7% YoY). However, revenue recognition trails its target due to delay in construction approvals and new launches. PVKP expects cash generation of INR7.3b in the next six months by exiting the Keppel JV, selling 50% stake in the Cochin housing project, and refund of security deposit by Andhra Pradesh State Authority. We cut our FY14E earnings by 10% due to delayed revenue recognition. Maintain BUY with TP of INR82 as earnings should recover with 42% growth next year. Click here for report » Indofood Sukses Makmur (INDF IJ) The good and the bad Share Price: IDR7,300 | Target Price: IDR8,000(+10%) | MCap (USD): 5.6B | ADTV (USD): 6M Maintain HOLD, TP of IDR8,000 (+9.6% upside), which implies 17.9x FY14F PER. Transferring coverage to Anthony Yunus. Upside may come from MINZ�s consolidation, Bogasari�s volume improvement and agribusiness on higher CPO prices. However, margin pressure on ICBP likely to persist in FY14F. Moreover, stock�s NAV discount of only 13% vs 24% in Dec-13. Click here for report » Banking Sector Update Malaysia Banking Sector Stable loan growth in February Industry loan growth was decent at 10.7% YoY in Feb 2014 versus 11.0% in Jan 2014. Loan applications rebounded to 9.7% YoY in Feb 2014 vs -14.2% YoY in Jan 2014 but 3M MA trend still down Still NEUTRAL on the banking sector; BUYs are AMMB, HL Bank and HL Financial Group. Click here for report » SapuraKencana Petroleum (SAKP MK) Rigs galore Share Price: MYR4.56 | Target Price: MYR5.30 (+16%) | MCap (USD): 8.4B | ADTV (USD): 12.8M Secures 3 rig charter extensions and 1 new rig contract. Contracts for 3 other rigs to expire in 2Q14. Maintain BUY and MYR5.30 SOP TP. Click here for report » Energy Development Corp (EDC PM) Strong 4Q14 prompts upgrade Share Price: PHP5.68 | Target Price: PHP6.90(+22%) | MCap (USD): 2.4B | ADTV (USD): 2M Reiterate BUY with slightly higher TP of PHP6.90. Upgrade 2014 forecasts on higher-than-expected 4Q13 results, but 2015 estimates intact. 2015 should reflect back-to-normal operations as we expect core net profits of PHP10.97b. (Full report will be sent later ECONOMICS Economics Thailand Economics Upside risks to cost-push inflation However, inflation in Thailand would be curbed by weak domestic demand. At the moment, we do not see inflation as a significant constraint on BoT�s monetary easing. Click here for report »     Click here for full Regional Daily report »