Regional Daily, Maybank KE (2014-06-05)

Daily 05 June 2014 TOP VIEWS KNM Group (KNMG MK) | Initiation Venture Corp (VMS SP) | Company Update NetEase Inc. (NTES US) | Company Update KNM Group (KNMG MK) Reformed and ready to grow Share Price: MYR0.76 | Target Price: MYR1.00 (+32%) | MCap (USD): 0.4B | ADTV (USD): 5.8M Initiate BUY and MYR1.00 TP (13x FY15) on improving riskreward outlook. KNM is now on a more solid footing for growth, with a stronger balance sheet and improving outlook. RAPID play is a short-term catalyst; executing the Peterborough waste-to-energy project is a game changer. Click here for report » Venture Corp (VMS SP) Underappreciated signposts Share Price: SGD7.37 | Target Price: SGD8.64 (+17%) | MCap (USD): 1.6B | ADTV (USD): 3M Firmly on track for an earnings recovery; reiterate BUY with TP of SGD8.64 based on 16x FY14E P/E. Key catalysts: New customers ramping up contributions and existing customers continuing to improve. M&A among its customers a risk but history tells us that most acquirers return to Venture. Click here for report » NetEase Inc. (NTES US) Another hit game! BUY on weakness Share Price: USD69.64 | Target Price: USD102.00(+46%) | MCap (USD): 9.0B | ADTV (USD): 48M BUY NetEase on sector weakness as it just released another blockbuster game. Two more such games due for release in Jun-Jul. Come 3Q, NetEase should have five smash-hit games ranking top 10 in China, prompting significant EPS upgrades by the Street. Better yet, NetEase�s PC games registered stable QoQ traffic growth in 2Q, based on our estimates (Figure 1). All told, maintain Street-high TP of USD102. Click here for report » COMPANY NOTES China Property | OVERWEIGHT Unilever Indonesia (UNVR IJ) | Company Update Sunway (SWB MK) | Company Update Metro Pacific Investments (MPI PM) | Company Update Malee Sampran (MALEE TB) | Company Update Tech-Tracks China Property Sector Update Slight recovery in May volume GFA transacted recovered in May (MoM) for surveyed Tier 2 & 3 cities while volume sold for Tier 1 cities was down slightly MoM, according to CREIS data. Minor loosening in property policy in Zhengzhou, Yangzhou, Tongling (Anhui), Xuancheng (Anhui), Wuhu, Hangzhou and Haikou. We expect more support from local governments in select Tier 2 and 3 cities in 3Q, but not for Tier 1 cities or well-performing Tier 2 markets like Nanjing and Xiamen. Signals from the land market indicate that average national land cost per sq m dropped by 8% MoM in May and up 10% YoY, per CREIS. We believe sector welcomes potential weaker land costs given margin squeeze concerns. Looks like some developers such as Shimao are delaying some available for sale resources for launch for 2Q14 to 3Q14. However, R&F and COLI to proceed with June launch schedule as planned. Click here for report » Unilever Indonesia (UNVR IJ) A challenging year Share Price: IDR30,050 | Target Price: IDR22,350(-26%) | MCap (USD): 19.5B | ADTV (USD): 5M UNVR highlights concerns on tightening competition and margin pressure in FY14 at AGM. Final dividend of IDR371/share translates to 1.2% yield. Reiterate SELL with TP of IDR22,350, implying 28.8x FY14F PER. Click here for report » Sunway (SWB MK) Launching Iskandar project soon Share Price: MYR3.21 | Target Price: MYR2.80 (-13%) | MCap (USD): 1.7B | ADTV (USD): 0.9M Management remains confident on its Iskandar Malaysia project. First phase of Sunway Iskandar project to launch by July 14. TP is unchanged at MYR2.80 (on 0.58x P/RNAV). HOLD. Click here for report » Metro Pacific Investments (MPI PM) All negatives in, still BUY Share Price: PHP5.29 | Target Price: PHP6.10(+15%) | MCap (USD): 3.1B | ADTV (USD): 3M We transfer coverage to Rommel Rodrigo with a BUY rating. Our NAV-based TP of PHP6.10 implies 15% potential upside. We accounted for regulatory risks by factoring in the worst outcomes in the regulated businesses. Still, we see 31% earnings growth this year driven by water business contribution. Three-year net profit CAGR is 8%. (FULL REPORT WILL BE OUT SOON) Malee Sampran (MALEE TB) Outlook improving, CMG signed in Share Price: THB41.50 | Target Price: THB47.00(+13%) | MCap (USD): 178M | ADTV (USD): 0.6M Maintain BUY with Gordon Growth-based TP of THB47 as Malee set to benefit from a return of consumer confidence. Exports and domestic sales of Malee brand has performed well in 2Q14 whilst margins have improved. Signed 3 contract manufacturing (CMG) deals, could pick up pace. Click here for report » Tech-Tracks Regional Quants Spotlight on Thailand and Singapore Thailand, Singapore and Hong Kong are leading the regional charge, whilst Malaysia, Indonesia, Vietnam and Philippines are succumbing to some profit-taking. Top BUYS: China U-Ton Holdings Limited (8232 HK), UMS Holdings Limited (UMSH SP), PT Wintermar Offshore Marine Tbk (WINS IJ), and Thai Wah Food Products PCL (TWFP TB). Top SELLS: Maxis Berhad (MAXIS MK), Manila Electric Company (MER PM) and RangDong Light Source & Vacuum Flask (RAL VN). Click here for report »