Regional Daily, Maybank KE (2014-07-23)

Daily 23 July 2014 TOP VIEWS Indonesia Strategy Bloomberry Resorts (BLOOM PM) | Rating change SATS (SATS SP) | Rating change Yuexiu Property (123 HK) | TP Revision Indonesia Strategy Moving forward Strategy report Despite the rejection of election results by Prabowo, we see a peaceful transfer of leadership post-election. Thus, the market should continue to see positive bias and will refocus to 2Q14 results. Expect earnings momentum to slow in 2Q14 as cost pressure increases while pricing power remains weak. We reiterate our bullish view with unchanged 2015F index target of 6,000 on Indonesia�s long-term prospects. Click here for report » Bloomberry Resorts (BLOOM PM) Integrated resort realized Share Price: PHP11.40 | Target Price: PHP14.00(+23%) | MCap (USD): 2.8B | ADTV (USD): 2M Upgrade to BUY and raise TP to PHP14.00 with 22% upside. Phase 1A expansion, to be completed in 4Q14, adds hotel rooms, gaming facilities and entertainment amenities resulting in higher EBITDA margins + faster earnings growth. BLOOM will benefit from build-up of critical mass in Entertainment City and attract both VIP and mass market Click here for report » SATS (SATS SP) Persistent near-term headwinds Share Price: SGD3.18 | Target Price: SGD2.50 (-21%) | MCap (USD): 2.9B | ADTV (USD): 2M Downgrade to SELL with revised TP of SGD2.50, based on 16x FY3/15E P/E. We expect near-term earnings to be dampened by escalating costs and a weak air cargo business. Sparked by another quarter of weak earnings performance in 1QFY3/15, consensus estimates could be cut by up to 10%. Click here for report » Yuexiu Property (123 HK) 2015 looks better after tough times Share Price: HKD1.56 | Target Price: HKD2.00 (+28%) | MCap (USD): 1.9B | ADTV (USD): 4M Though its execution needs improvement, we believe that Yuexiu Prop�s valuation of 0.5x 2014 P/BV and 6% dividend yield has priced in much downside. Amidst a macro backdrop of more Tier 2 cities loosening, it should benefit from recent loosening in Wuhan and Hangzhou. Maintain BUY with a revised TP of HKD2.00. Due to a difficult physical market, we lower our GPM forecasts and expect only 11% core profit growth for 2014. However, we believe 2015 looks better with 26%+ forecast profit growth. See potential room for improvement in leveraging its good experience in sale of commercial GFA Average costs of borrowing to drop slightly YoY in 2014, down from last year�s 5.65% due to repayment of some trust financing. Click here for report » COMPANY NOTES Bajaj Auto (BJAUT IN) | Idea Cellular(IDEA IN) | Results Review Jasa Marga (JSMR IJ) | Results Review Lippo Karawaci (LPKR IJ) | Rating Change Bank Rakyat Indonesia (BBRI IJ) | Results Review MY Automotive Sector | OVERWEIGHT Quill Capita Trust (QUIL MK) | Company Update Robinson Department Store (ROBINS TB) | Company Update Kiatnakin Bank (KKP TB) | Results Review Bajaj Auto (BJAUT IN) Soft 1Q; 2H to lead recovery Share Price: INR2,072 | Target Price: INR2,720(+31%) | MCap (USD): 9.9B | ADTV (USD): 13M Maintain BUY and Street-high TP of INR2720. 1Q EPS was INR25.6 (19% of our FY15F EPS of INR132.8), slightly below our and Street expectations. 1Q EPS below expectations due to 11% YoY fall in dom. volume and increased depreciation, employees and taxes. We expect BJAUT�s dom. motorcycle volume to recover in 2H on new launches and make up for 1H underperformance. Stock has already corrected 12% from its recent high and is now trading at a PER of 14x FY16F (30% discount to HMCL). We maintain EPS growth forecast of 16% for each of the next two years with strong possibility of upward revision. Click here for report » Idea Cellular(IDEA IN) Stays connected to strong performance Share Price: INR140 | Target Price: INR203(+45%) | MCap (USD): 8.2B | ADTV (USD): 20M Maintain BUY with TP of INR203 based on SOP, which includes INR189 for the core business based on EV/EBITDA of 7x FY16 and INR14 for value of the telecom tower assets. 1QFY15 EPS of INR2.05, +16% QoQ, +47% YoY beat consensus and our forecasts, driven by: 1) a strong 7.3% QoQ revenue growth; 2) 154bps QoQ increase in EBITDA margin to 33.2%. We remain confident on IDEA's ability to deliver sustainable growth and increase our FY15F EPS by 7% to INR7.4 (+25% YoY) and FY16F EPS by 4% to INR8.9 (+20% YoY). (FULL NOTE WILL BE OUT SOON) Jasa Marga (JSMR IJ) 2Q in line, defensive play: Stay BUY Share Price: IDR6,400 | Target Price: IDR7,000(+9%) | MCap (USD): 3.8B | ADTV (USD): 3M Reiterate BUY with unchanged TP of IDR7,000. Defensive stance remains as JSMR to benefit from higher inflation from potential fuel-price adjustment post presidential elections. 2Q14 earnings IDR435b (+15.6% QoQ), taking 1H14 net profit to IDR812b (+6.6% YoY), on track to reaching our FY14F. Earnings catalysts in FY14 from recent commencement of new route JORR W2 North (the missing link) and upcoming scheduled toll adjustments on two routes in 2H14. Click here for report » Lippo Karawaci (LPKR IJ) Company cuts guidance; D/G HOLD Share Price: IDR1,160 | Target Price: IDR1,200(+3%) | MCap (USD): 2.3B | ADTV (USD): 8M Lippo Karawaci cut 2014F pre-sales target from IDR6.8t to IDR4.7t (vs our IDR5.6t) as it finds it harder than expected to obtain higher plot ratio licenses. Cut to HOLD. 2Q14 pre-sales is IDR739b (-18% QoQ) and 1H14 pre-sales is IDR4,640b (-37% YoY). TP unchanged at IDR1,200. Deep 41% disc. to RNAV should provide some cushion to the downside. Prefer BSDE, BEST. Click here for report » Bank Rakyat Indonesia (BBRI IJ) Stable 2Q14; Remains our Top Pick Share Price: IDR11,700 | Target Price: IDR13,000(+11%) | MCap (USD): 24.9B | ADTV (USD): 27M 1H14 results in line with our estimates. Net profit up 17% YoY to IDR11.7t. As expected, NIMs eased to 8.9% due to growing corporate lending and rising CoF. The bank also set aside more provisioning in anticipation of an uptick in NPLs. BBRI stays our Top Pick for its strong foothold in micro business with TP at IDR13,000 (FY15: 11.4x PER & 2.8x P/BV). Click here for report » MY Automotive Sector 1H14 TIV within radar Sector update June�s TIV still strong at 58.6k units (+9% YoY). Our 2014 TIV forecast of 675k units (+3% YoY) is unchanged. Maintain OVERWEIGHT. BAuto is our top BUY in the sector. Click here for report » Quill Capita Trust (QUIL MK) Declining earnings growth Share Price: MYR1.19 | Target Price: MYR1.16 (-3%) | MCap (USD): 0.1B | ADTV (USD): 0.1M 1H14 core net profit of MYR16.7m (-2% YoY) was in line. Huge incoming office supply remains a concern to us. No change to earnings forecasts and MYR1.16 TP. HOLD. Robinson Department Store (ROBINS TB) Very weak 2Q expected Share Price: THB58.50 | Target Price: THB53.00(-9%) | MCap (USD): 2.0B | ADTV (USD): 2M Maintain HOLD with DCF-base target price of THB53. 1H14 net profit could reach THB933m, only 38% of our FY forecast; Hit by a triple whammy from slowing consumption, store disruption and mild losses from new Vietnamese store. Forecast downside risk is high even as we pencil in a strong 4Q on account of six new store openings, one in Vietnam. Click here for report » Kiatnakin Bank (KKP TB) Weak earnings outlook in 2H14 Share Price: THB43.75 | Target Price: THB40.00(-9%) | MCap (USD): 1.2B | ADTV (USD): 3M 2Q14 earnings fell 14% QoQ and 51% YoY to THB600m, below our and consensus forecasts by 14% and 33% due to THB497m in losses from the sale of repossessed cars. Lower 2014 loan growth by 3ppt to 5% and assume increased losses from asset sales of THB1.1b from THB300m. Cut FY14/15F earnings by 26%/11%. Maintain HOLD and trim TP to THB40 (from THB42), implying 11x 2014F PE, 0.9x P/BV and 4.2% dividend yield. Click here for report »