Regional Daily, Maybank KE (2014-04-09)

Daily 09 April 2014 TOP VIEWS Malaysia Airports (MAHB MK) | Company Update Agile Property (3383 HK) | Company Update China LotSynergy Holdings | Company Update Malaysia Water Sector Malaysia Airports (MAHB MK) | Company Update KLIA2 launch date: Pie in the sky | SELL Share Price: MYR8.09 | Target Price: MYR7.03 (-13%) | MCap (USD): 3.3B | ADTV (USD): 1.3M Deputy Minister of Transport says KLIA2 is on track to start operations on 2 May, and the LCCT will close on 9 May. AirAsia Group says it will stay put at LCCT until the safety and security issues are fully resolved at KLIA2. Maintain SELL as MAHB is expensive relative to peers. Our forecasts considered a delayed KLIA2 opening, but are revised down on acquisition of 40% in Sabiha G�k�en airport. Click here for report » Agile Property (3383 HK) | Company Update Positive Pointers from HK NDR | BUY Share Price: HKD6.95 | Target Price: HKD8.90(+28%) | MCap (USD): 3.1B | ADTV (USD): 8M Reiterate BUY with unchanged HKD8.90 TP on some positive pointers from Agile�s HK NDR. We expect FY14 presales to exceed CNY48b target as the initial step of re-rating followed by de-leveraging further down the road. Company guides for 2015 net debt/total equity of approx 60%, from 72% in 2013. Mixed feedback as some find cheap valuation (0.58x 2014 book value and high discount to NAV) as attractive and see Street expectation as low. However, some find its leverage too high and wonder how it can lift its property sell-through ratio to targeted 57-58% in 2014 from ~52% in 2013. Could be facilitated by more sales incentives and some new project launches of small-sized units. Following executive board changes, we believe Agile�s earlier recruitment of some staff from Vanke and COLI could help. Click here for report » China LotSynergy Holdings | Company Update CB announced, M & A in sight; BUY Share Price: HKD0.76 | Target Price: HKD1.00(+32%) | MCap (USD): 735M | ADTV (USD): 30M Maintain BUY and HKD 1.00 TP following announcement of up to USD100m HKD convertible bond due 2019. We believe proceeds will be used for earning accretive acquisitions. Click here for report » Malaysia Water Sector S114 conditionally approved D/G Gamuda to HOLD Cabinet has conditionally approved S114 invocation but the commencement date is not decided yet. The issue here is pricing rather than operational failure. We still believe a willing buyer, willing seller price is the way. We downgrade Gamuda to HOLD. Click here for report » COMPANY NOTES Japfa Comfeed (JPFA IJ) | Company Visit Bangkok Dusit Medical Services (BGH TB) | Company Update Singapore Telcos | NEUTRAL Regional Plantations | NEUTRAL Japfa Comfeed (JPFA IJ) | Company Visit Head of the pack, attractively valued; BUY Share Price: IDR1,465 | Target Price: IDR1,850(+26%) | MCap (USD): 1.4B | ADTV (USD): 0.6M Remain positive on JPFA after meeting management. Reiterate BUY and Street-high TP of IDR1,850, which implies 17x FY14F PER or 1-STD above its five-year historic mean. JPFA plans to expand its breeding farm capacity by 25% in FY14F-15F versus 12% for feed mill capacity. The surge in cattle import quota in Indonesia will be positive for JPFA�s under-utilised cattle business. Click here for report » Bangkok Dusit Medical Services (BGH TB) | Company Update Pressure from all fronts, prefer BH: HOLD Share Price: THB133 | Target Price: THB140 (+5%) | MCap (USD): 6.3B | ADTV (USD): 7M Maintain HOLD; BGH jumped 14% since late-Jan14 but still lagged BH, which rose 20%. We prefer BH over BGH because of i) obvious ST catalysts, ii) stronger earnings outlook, and iii) cheaper valuation. Outperformed by BH on weaker EBITDA margin outlook that has tendency to weaken as domestic economy continues to worsen; domestic patients grow 2x GDP growth, historically. Click here for report » Singapore Telcos | NEUTRAL Sector Update Handset subsidies in freefall Maintain NEUTRAL on sector with BUY on StarHub and M1 unchanged. M1 preferred for likelihood of special dividend. Lower handset subsidies for popular models such as Samsung Galaxy S5 and HTC One M8 should see telco margins benefit. Government cut on SIM cards from 10 to three per sub could hurt prepaid mobile revenue. Click here for report » Regional Plantations | NEUTRAL Sector Update Rising risk of a weak El Ni�o in 2H Australia Bureau of Meteorology raises the odds of an El Ni�o developing in 2H14, at above 70%. Rainfall has slowly returned to areas affected by the dry spell in February, providing the much needed relief. CPO price usually weakens towards the middle of the year. We turn Neutral on the sector as we approach mid-year. Click here for report »     Click here for full Regional Daily report »