Regional Daily, Maybank KE (2014-08-04)

Daily 04 August 2014 TOP VIEWS SP: DBS Group (DBS SP) | Company update RGL: Regional Oil & Gas | OVERWEIGHT China Overseas Land (688 HK) | Results review SP: DBS Group (DBS SP) Positive sound bites from briefing Share Price: SGD18.22 | Target Price: SGD20.70 (+14%) | MCap (USD): 35.8B | ADTV (USD): 48M Positive management tone. No signs of stress in China book. Internal controls to ensure China�s loan quality stays sound. SGD liquidity remains ample. 2Q SGD deposits shrank QoQ due to the withdrawal of a SGD5b short-term placement by one customer. DBS still our top sector BUY. TP (13x average FY14E-15E P/E) unchanged. Click here for report » RGL: Regional Oil & Gas Roadshow feedback Sector update RAPID, rigs, Indonesian OSVs and build-to-stock (BTS) risk-reward were highlights during our marketing trip. South China Sea�s geopolitical risks, global capex cuts and rig oversupply were some of investors� concerns. Our key BUYs are KNM, Perdana Petroleum, Ezion and Nam Cheong. Click here for report » China Overseas Land (688 HK) Solid 1H14 results Share Price: HKD 23.25 | Target Price: HKD25.60 (+10%) | MCap (USD): 24.5B | ADTV (USD): 76M Maintain BUY due to good execution and solid results; TP HKD25.6 (10% upside). 1H core profit was HKD10.8b, representing 47% of consensus full-year estimate. This is a higher lock-in than last year�s ratio. Net gearing rose to 37.2% as of June, which was satisfactory and lower than the above 40% we expected. Little info on asset injection, which we see as important for share price as COLI�s landbank is relatively short. COLI maintains its full-year guidance of HKD50b of new land acquisition, of which only HKD17b was done in 1H. Click here for report » COMPANY NOTES HCL Technologies (HCLT IN) | TP Revision Bank of the Philippine Islands (BPI PM) | Results Review Aboitiz Equity Ventures (AEV PM) | Results Review DBS Group (DBS SP) | Results Review Cosco Corp (COS SP) | Results Review L.P.N. Development (LPN TB) | Results Preview Thai Vegetable Oil (TVO TB) | Results Preview Central Plaza Hotel (CENTEL TB) | Result Preview HCL Technologies (HCLT IN) 4Q EPS beat by a wide margin; BUY Share Price: INR1,555 | Target Price: INR1,752(+13%) | MCap (USD): 18.0B | ADTV (USD): 27M Maintain BUY with new TP of INR1,752 (raised by 5%) based on 17x FY15F (FYE June) PER. 4QFY14 EPS of INR26.2 (+13% QoQ and +54% YoY) beat consensus/our forecastby 13.5%/16%. Revenue (in USD) was in line with our forecast. Higher EBITDA margin and treasury income, and lower tax rate helped to top forecasts. We remain confident on HCLT's ability to outperform the sector in terms of revenue growth, and expect revenue CAGR (in USD) of 16% over FY14-16. We factor in higher EBITDA margin and raise our FY15/16F EPS by 5%/6%. Click here for report » Bank of the Philippine Islands (BPI PM) Slight earnings recovery in 2Q14 Share Price: PHP95.80 | Target Price: PHP93.50(-2%) | MCap (USD): 8.7B | ADTV (USD): 3M Maintain HOLD with share price at a premium to our target price of PHP93.50. 1H14 earnings lower than expected at PHP8b, down 33% YoY. Likely to miss earnings guidance. Loan growth remains robust at 23% but treasury operations still weak. (Full report will be out soon) Aboitiz Equity Ventures (AEV PM) 1H14 core income in line Share Price: PHP55.15 | Target Price: PHP49.60(-10%) | MCap (USD): 7.0B | ADTV (USD): 2M Core earnings down 26% YoY as Aboitiz Power Corp, Union Bank of the Philippines both posted lower profits in 1H14. Near-term prospects remain subdued as downward momentum expected to continue for the rest of 2014. Maintain SELL with TP of PHP49.60. (Full report will be out soon) DBS Group (DBS SP) Another strong quarter Share Price: SGD18.22 | Target Price: SGD20.70(+14%) | MCap (USD): 35.8B | ADTV (USD): 48M 2Q14 beat expectations, thanks to strong NIM, customer-related non-interest income and lower provisions. NIM improved further. Fee income held up. Better credit quality. Ample SGD liquidity. Reiterate BUY and TP of SGD20.70, set at 13x average FY14E-15E EPS. Still our preferred pick. Best positioned to benefit from rising interest rates. Click here for report » Cosco Corp (COS SP) No reprieve yet Share Price: SGD0.71 | Target Price: SGD0.67(-6%) | MCap (USD): 1.3B | ADTV (USD): 0.5M 2Q14 PATMI of SGD14.3m (+18.8% YoY, +13.3% QoQ) in line. Cut FY14E order wins from USD2.0b to USD1.5b to reflect tepid offshore and shipbuilding outlook. Maintain SELL with TP trimmed to SGD0.67 from SGD0.68, pegged to trough P/BV of 1.1x. Click here for report » L.P.N. Development (LPN TB) Expect weak 2Q14 Share Price: THB22.00 | Target Price: THB14.00(-36%) | MCap (USD): 1.0B | ADTV (USD): 4M Maintain SELL and Street-low TP of THB14 based on 8.9x FY14 PE; multiple headwinds ahead on further presales cut and lowest presales recovery in the sector in 2H14. Expect weak 2Q14 profit of THB361m (EPS THB0.24), dropping 55% YoY but flat QoQ. Results out 8 Aug. Sharp drop in 2H14 presales is expected after postponing the launch of Lumpini Rangsit Phase II (THB3.6b) due to EIA issue and three provincial projects (THB2.6b) from concern over second home demand. (Full report will be out soon) Thai Vegetable Oil (TVO TB) 2Q to be the last hurray this season Share Price: THB22.50 | Target Price: THB20.00(-11%) | MCap (USD): 564M | ADTV (USD): 0.7M Maintain SELL as soybean prices is correcting on high inventory. Prospect of bumper high harvest will keep prices low. Our 12M TP is THB20 - DCF-based. We expect 2Q14 net profit to reach THB475m, up 109% YoY but down 9%. If our forecast is met, 1H14 would account for 73% of our forecast. We maintain our forecast as we expect a major earnings contraction in the 2H following a deep correction in soybean prices starting July. Downside risk on estimates is emerging. Soft soybean price is expected to remain low until the Latin American harvest season starting March 2015. Click here for report » Central Plaza Hotel (CENTEL TB) Expect a weak quarter Share Price: THB36.00 | Target Price: THB40.00(+11%) | MCap (USD): 1.5B | ADTV (USD): 3M Occupancy rate in 2Q14 expected to reach 69% (76% in 1Q14, 75% in 2Q13), and ADR to increase 10% YoY. RevPAR expected to rise 1% YoY but drop 37% QoQ on seasonality. Estimate net profit of THB46m, falling 91% QoQ and 76% YoY on weak hotel and food business. Consensus expects net profit of THB219m on the back of flat sales growth. Maintain HOLD and raise TP to THB40, based on DCF at 8.5% WACC and 3% terminal growth. Our TP implies 2015F multiples are 30.2x PER, 4.3x PBV, and 1.1x PEG. Positives priced in as stock is up 31% YTD. We prefer MINT. Click here for report » ECONOMICS Thailand Economics - Inflation further eased Thailand Economics - Inflation further eased Upside risks to demand-pull inflation Economics Given junta council�s policies to reduce cost of living, recent appreciation of the baht, and fall in oil prices, we maintain our inflation forecast of 2.25% against consensus� 2.40%. However, there are still upside risks to our inflation forecast from the demand side. We expect the MPC to remain comfortable with its current monetary course and keep the key rate at 2.00% for the rest of this year. (Full report will be out soon)