Regional Daily, Maybank KE (2014-06-18)

Daily 18 June 2014 TOP VIEWS Alliance Financial Group (AFG MK) | Initiation Maanshan Steel (323 HK) | Initiation Thailand Property | NEUTRAL Alliance Financial Group (AFG MK) Great things in small packages Share Price: MYR4.69 | Target Price: MYR5.50 (+17%) | MCap (USD): 2.2B | ADTV (USD): 1.7M Initiating coverage on AFG with a BUY for exposure to a small niche bank with strong fundamentals. High capitalization level promotes strong dividend payout (decent 4.9% FY15 yield) and ROE enhancement. TP MYR5.50 tagged to a P/BV of 1.9x, supported by a rising ROAE of at least 14% in FY15. Click here for report » Maanshan Steel (323 HK) Riding the railway wheel of fortune Share Price: HKD1.64 | Target Price: HKD2.00 (+22%) | MCap (USD): 1.7B | ADTV (USD): 2M Initiate at BUY with 22% upside to our 0.5x P/BV-based HKD2.00 TP. We prefer it to Angang (347 HK; HKD4.84; SELL) because of its higher earnings leverage to a recovery in industry margins with rising railway profits as support. Losses in 1Q14 are turning to profit in 2H14E on lower iron ore costs and rising railway sales volumes where it has a market leading 45% share. Maanshan also recently acquired a French company with expertise in high speed railway wheels. Maanshan is benefitting from a surge in China�s railway spending, which is driving a 25% YoY rise in its railway business GP to CNY1.58b in 2014E (22% of GP), and helping offset the adverse impact of the weak property market. Click here for report » Thailand Property Sector Update Bargain hunting over: d/g NEUTRAL Downgrading sector to NEUTRAL from OVERWEIGHT due mainly to valuations. Most developers are trading at above their seven-year average despite lack of pre-sales catalyst. Residential prop sector outperformed SET by 13% YTD. PS was the best performer at +57% YTD, followed by SPALI (+51%) and AP (+40%). Top picks remain AP (TP THB6.5) and SPALI (TP THB25.5). HOLDs on PS (TP THB27.0) and LH (TP THB9.0). LPN (TP THB14.0) and QH (TP THB3.0) are our least preferred (SELL). Click here for report » COMPANY NOTES Bumi Resources Minerals (BRMS IJ) | Company Update Malindo Feedmill (MAIN IJ) | TP Revision Berjaya Sports Toto (BST MK) | Results Review Robinsons Retail Holdings (RRHI PM) | Company Update Singapore Offshore & Marine | NEUTRAL Bumi Resources Minerals (BRMS IJ) Getting closer Share Price: IDR230 | Target Price: IDR350(+52%) | MCap (USD): 498M | ADTV (USD): 0.3M Maintain BUY with TP IDR350 (0.6x PBV). Undemanding 0.4x PBV given the upcoming positive developments. Near-term catalysts are ownership and management changes. New ownership and management should be positive for BRMS� balance sheet and projects. Click here for report » Malindo Feedmill (MAIN IJ) New capacity to offset margins risk Share Price: IDR2,800 | Target Price: IDR3,300(+16%) | MCap (USD): 424M | ADTV (USD): 1M Maintain BUY on continued strong fundamental and lower TP to IDR3,300, which implies a 14.3x FY15F PER. Potential surge in volume from completion of two new mills (expected within 12 months) that will add 60% of capacity. Margin pressure continues in 2Q14, but outlook will improve in 4Q14. Click here for report » Berjaya Sports Toto (BST MK) Weak end to FY4/14 Share Price: MYR3.80 | Target Price: MYR3.95 (+4%) | MCap (USD): 1.6B | ADTV (USD): 1.0M 4QFY4/14 results are below expectations. Dividends are in-line, however. Maintain HOLD and MYR3.95 DCF based TP. Click here for report » Robinsons Retail Holdings (RRHI PM) Stronger sales in 2Q14 Share Price: PHP66.50 | Target Price: PHP77.50(+17%) | MCap (USD): 2.1B | ADTV (USD): 2M RRHI�s supermarket SSSG accelerates to 4-4.5% YTD from 3.7% in 1Q14 while gross margin is maintained at above 18%. Convenience SSSG picked up in May from a decline in 1Q14. Reiterate BUY with TP of PHP77.50 on improving prospects while valuation remains undemanding. (FULL REPORT WILL BE OUT SOON) Singapore Offshore & Marine Sector Update Insights from key OSV players OSV operators/owners remain optimistic of the long-term fundamentals of the offshore oil and gas sector but are cautious about near-term headwinds. Echoing our view, key players expect demand for newer vessels to drive replacement demand for OSVs. Maintain NEUTRAL on the sector. For exposure, we like Ezion, Mermaid Maritime, Nam Cheong and Vard. Click here for report » ECONOMICS Singapore Economics Singapore Exports, May �14 Declining shipments Non-Oil Domestic Exports (NODX) in May 2014 surprised on the downside, declining by -6.6% YoY (Apr 2014: +0.9% YoY). Electronics continue to decline (May 2014: -15.3% YoY), pulled down by almost all categories. Shipments to key markets are in the red except for China, Malaysia, Indonesia and India. Keeping our 2014 NODX forecast at +3.1% for now. Click here for report »