Regional Daily, Maybank KE (2014-04-10)

Daily 10 April 2014 TOP VIEWS Malaysia Property | NEUTRAL Hemaraj L & D (HEMRAJ TB) | Company Update Ezion Holdings (EZI SP) | Flash Note Japfa Comfeed (JPFA IJ) | Company Visit Malaysia Property | NEUTRAL Sector update Towering oversupply We remain cautious on Iskandar Malaysia (IM)�s medium-term outlook post-site visit last week. Rising fears of property oversupply on IM hotspots due to aggressive property launches by the foreign developers. Maintain Neutral. Our preferred pick is Glomac. We also like RTO-themed Eco World (ECW MK; Not rated) and view it as the new bellwether for the property sector. Click here for report » Hemaraj L & D (HEMRAJ TB) | Company Update Robust transfer; soft presales; BUY Share Price: THB3.34 | Target Price: THB4.80 (+44%) | MCap (USD): 1.0B | ADTV (USD): 2M HEMRAJ reports land transferred in 1Q14 was 809 rai, c.41% of our FY target. At 2013�s ASP this would imply land revenues of THB2.2bn, up 54%YoY, signaling strong 1Q14 earnings, +44%YoY based our estimate � a stand out in current conditions whereby profit growth expectations are low. Pre-sales running low at 121 rai, 7.5% of internal target, 7.1% of ours. Short term hiccup, maintain target Utilities/rental volumes mildly higher; translating into high single digit growth in revenues. Contribution from power is to surge as both IPP Gheco 1 and SPP Gulf J-Power are operating at 100% availability. Maintain BUY with 12M NAV-based TP of THB4.8 given resilient short term and positive long term outlook. Click here for report » Ezion Holdings (EZI SP) | Flash Note Getting things moving down under; BUY Share Price: SGD2.11 | Target Price: SGD2.90(+37%) | MCap (USD): 2.0B | ADTV (USD): 11M Maintain BUY and TP of SGD2.90, pegged to 13x FY14E P/E following equity entry into AusGroup. Ezion to take 6.9% stake in AusGroup and enter MOU with the latter for collaboration in Australia. A synergistic and mutually beneficial arrangement that could create more opportunities for both parties in Australia. Click here for report » 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 » COMPANY NOTES Thailand Hotels | OVERWEIGHT Bharat Heavy Electricals (BHEL IN) | Company Update Sobha Developers (SOBHA IN) | Company Update Malaysia Media | NEUTRAL San Miguel Pure Foods Co (PF PM) | Results Review Keppel Corp (KEP SP) | Flash Note Thailand Hotels | OVERWEIGHT Sector Update Down, but not out Tourist arrivals drop 9.4% YoY in Mar14 to 2.1m, declining 5.8% YoY in 1Q14. Tourism revenue decreases by 4%. 1Q14 occupancy expected to decrease to 61% from 64% in 4Q13 and 72% in 1Q13 due to political uncertainty. We expect a price war in the next six months. Maintain Overweight. MINT is our top BUY. Also BUY ERW on potential of its Hop Inn budget chain. HOLD CENTEL. Click here for report » Bharat Heavy Electricals (BHEL IN) | Company Update The disappointment continues; SELL Share Price: INR184 | Target Price: INR127(-31%) | MCap (USD): 7.5B | ADTV (USD): 7M Maintain SELL with INR127 TP as profit decline continues as expected. Provisional 4QFY14 profit down 50% YoY and full year earnings fall 52%. Further, the company fails to increase its backlog with FY14 order inflow down 10% to INR280b. We believe FY15 profit will decline by further 26%, making the stock unexciting at PER of 18.8x FY15F. Click here for report » Sobha Developers (SOBHA IN) | Company Update Momentum returns; BUY Share Price: INR385 | Target Price: INR431(+12%) | MCap (USD): 628M | ADTV (USD): 0.1M Maintain BUY with TP of INR431 as 4QFY14 presales recover with 20% QoQ growth supported by 4 new project launches worth INR19b. Full-year presales increase 6% to INR23b, 10% below guidance due to delayed launches in 3Q and weak performance in the north Indian market (Gurgaon). Increases FY14 average selling prices by 10%, which suggests strong property demand in south Indian market (mainly Bangalore). Click here for report » Malaysia Media | NEUTRAL Sector Update Return of football fever In this report we study the impact previous FIFA World Cups had on media companies. We observe a tendency to favour broadcast media over print media. Upcoming World Cup should be similar. Still NEUTRAL on the media sector. Media Prima while still a HOLD, may positively surprise. Sole BUY is Star. FULL REPORT TO BE SENT LATER San Miguel Pure Foods Co (PF PM) | Results Review MTM losses drags 2013 earnings Share Price: PHP225.00 | Target Price: PHP310.00(+38%) | MCap (USD): 836M | ADTV (USD): 0.4M 2013 operating results mainly in line with expectations. Maintain BUY even as forecasts and TP under review. FULL REPORT TO BE SENT LATER Keppel Corp (KEP SP) | Flash Note Extending its China Footprint Share Price: SGD11.00 | Target Price: SGD12.48(+13%) | MCap (USD): 15.9B | ADTV (USD): 28M Maintain BUY and TP of SGD2.90, pegged to 13x FY14E P/E following equity entry into AusGroup. Ezion to take 6.9% stake in AusGroup and enter MOU with the latter for collaboration in Australia. A synergistic and mutually beneficial arrangement that could create more opportunities for both parties in Australia. Click here for report » OTHERS Regional Quants Tech-Tracks Firmer undertone for Asia-Pac markets Sustained investor interest in emerging Asia buoyed markets in Vietnam, Malaysia, Indonesia, Thailand and Philippines. Hong Kong is playing catch-up with its ASEAN peers. Top BUYS: OCK Group Berhad (OCK MK), Great Wall Motor Company Limited (2333 HK), Straco Corporation Limited (STCO SP), PT Pembangunan Perumahan Persero Tbk (PTPP IJ), Hoa Phat Group JSC (HPG VN), Bangkok Aviation Fuel Services PCL (BAFS TB) and Universal Robina Company (URC PM). Click here for report »