Regional Daily, Maybank KE (2014-04-15)

Daily 15 April 2014 TOP VIEWS Indo Hanset Distributors | Initiation India IT | OVERWEIGHT TSMC (2330 TT/TSM US) | TP revision CapitaLand (CAPL SP) | Company Update Indonesia Hanset Distributors | OVERWEIGHT Initiating coverage A great structural growth story Initiate coverage on handset distribution industry with Overweight, and on Erajaya Swasembada (TP IDR1,632) and Tiphone Mobile (TP IDR1,003) with BUY. Prefer Tiphone. Growth is practically guaranteed with a structural push for smartphone ownership underway. Expect launch of more handsets at lower prices to drive 2014 growth; market stability is a boon. Click here for report » India IT Sector | OVERWEIGHT Sector Update Expect reaffirmation of positive outlook for FY15 Maintain Overweight on the India IT Sector. Our top picks include TECHM, TCS, and HEXW. For 4QFY14, we estimate flat net profit QoQ (34.3% YoY) for the 10 stocks in our coverage. 4Q is seasonally a weak quarter due to fewer billable days. FY15 growth outlook remains strong on the back of pickup in demand in the US and Europe. We believe faster pickup in demand would cause upside triggers to FY15 consensus forecast. Click here for report » TSMC (2330 TT/TSM US) | TP revision FY14 could be the best year Share Price: TWD120 | Target Price: TWD125 (+4.2%) | MCap (USD): 102B | ADTV: USD148M Raising TP to TWD125 on upward earnings revisions to reflect stronger-than-expected outlook. 1Q results and 2Q guidance to be out on 17 April � both are likely to be strong and ahead of Street expectations. FY14 may be the best year for TSMC, but growth of smartphones is slowing while new supply is rising and momentum is peaking, thus we maintain Hold. Click here for report » CapitaLand (CAPL SP) | Company Update Privatisation offer made for CMA Share Price: SGD2.92 | Target Price: SGD3.85(+32%) | MCap (USD): 10.0B | ADTV: USD21M CapitaLand makes a conditional offer of SGD2.22/share to privatise 65.3%-owned subsidiary CMA. Main rationale: To fully integrate CMA as part of its streamlining exercise and enhance its strength in building integrated developments. Maintain BUY and TP of SGD3.85. A delisting would be positive for CapitaLand but the offer price may be insufficient for CMA's minority shareholders to bite. Click here for report » COMPANY NOTES Indonesia Property | UNDERWEIGHT BDO Unibank Inc (BDO PM) | Rating Change Cache Logistics Trust (CACHE SP) | Rating Change Keppel REIT (KREIT SP) | Results review Indonesia Property | UNDERWEIGHT Sector Update Mixed 1Q14 pre-sales The 1Q14 pre-sales of four developers were relatively mixed. BSDE had the strongest pre-sales, followed by SMRA while the weakest were ASRI and CTRA. BSDE remains our top sector pick (BUY, TP IDR2,000). Remain cautious on ASRI (SELL, TP IDR500). Our target prices are under review post FY13 results. Overall, remain Underweight and maintain cautious sector stance due to macro uncertainties and high interest rate. Click here for report » BDO Unibank Inc (BDO PM) | Rating Change Fairly valued despite earnings upgrade Share Price: PHP87.00 | Target Price: PHP93.50(+7%) | MCap (USD): 7.0B | ADTV (USD): 7M Downgrade to HOLD on limited 7% upside. FY14 earnings upgraded 13% and TP raised to PHP93.50, equivalent to 1.95x 2014F PBV. Robust core lending and fee income as well as lower credit costs seen to offset weaker trading gains. Click here for report » Cache Logistics Trust (CACHE SP) | Rating Change New BTS asset to lift DPU; up to HOLD Share Price: SGD1.13 | Target Price: SGD1.15(+2%) | MCap (USD): 704M | ADTV (USD): 0.9M Foray into build-to-suit development with DHL Supply Chain at a total cost of SGD123.5m. New asset to account for 12% of our total GAV. Yield-on-cost estimated at ~11% on a stabilised basis, with 1.1-8.6% boost to FY15E-16E DPU. Upgrade to HOLD with a higher DDM-derived TP of SGD1.15. Click here for report » Keppel REIT (KREIT SP) In-line results; stable DPU Share Price: SGD1.17 | Target Price: SGD1.25(+7%) | MCap (USD): 2.6B | ADTV (USD): 4M 1Q14 results in line with our and market expectations. No news of MBFC Tower 3 acquisition from sponsor; equity fund-raising remains on the horizon. 1Q14 DPU flat YoY at 1.97 cts. Expect flat DPU CAGR over FY13-18E on income support expiry and marginal passing rents improvement. Click here for report » ECONOMICS Singapore GDP Adv. Estimate1Q 2014 Singapore GDP Adv. Estimate1Q 2014 Base effect Advanced estimate of 1Q 2014 GDP growth were +5.1% YoY and +0.1% seasonally-adjusted QoQ (saQoQ). Base effects plays a key role in the YoY and saQoQ figures given the flattish +0.6% YoY expansion in 1Q 2013 and robust +6.1% saQoQ rise in 4Q 2013. Maintain our 2014 growth forecast of +3.7% (2013: +4.1%). Official real GDP growth forecast remains at +2.0% to +4.0%. Click here for report »     Click here for full Regional Daily report »