Regional Daily, Maybank KE (2014-08-07)

Daily 07 August 2014 TOP VIEWS Standard Chartered (2888 HK) | Rating Change TCL Communication (2618 HK) | Result Preview MY Banking Sector | NEUTRAL Yangzijiang Shipbuilding (YZJSGD SP) | Rating Change Standard Chartered (2888 HK) Asset quality beat; Upgrade to BUY Share Price: HKD160.40 | Target Price: HKD177.00(+10%) | MCap (USD): 50.2B | ADTV (USD): 14M 1H net met management guidance and consensus. We have more positive outlook than the market on NIM & credit costs. Upgrading to BUY from HOLD. Raising TP from HKD163.50. Potential new regulatory cost of USD200m, less than vs 2012. Click here for report » TCL Communication (2618 HK) A sweet spot Share Price: HKD10.24 | Target Price: HKD12.00(+17%) | MCap (USD): 1.6B | ADTV (USD): 6M 2Q results out on 14 August. Expect results to be strong and meet our Street-high forecast which is 30% above consensus. Expect TCL to raise its full-year sales guidance to reflect better outlook, product mix and share gain. Stock remains attractively priced � ROE to normalize to 30-40% while cash dividend yields 5%. Reiterate BUY, HKD12 TP. Click here for report » MY Banking Sector Merger stirs some interest Sector Foreign investors we met in Singapore and Hong Kong mainly sidelined Malaysian banks. Recent CIMB-RHB-MBSB merger stirred some interest, as has ownership liberalisation in the Philippines. Remain sector Neutral. OSK and MBSB are our preferred exposure to the CIMB merger. AFG still our top pick. Click here for report » Yangzijiang Shipbuilding (YZJSGD SP) Brighter order prospects than peers; U/G BUY Share Price: SGD1.07 | Target Price: SGD1.38 (+30%) | MCap (USD): 3.3B | ADTV (USD): 8M 2Q14 PATMI beat expectations on better revenue and margins. Raise EPS on higher margin and order-win forecasts. Upgrade to BUY from HOLD, with higher SOTP-based TP of SGD1.38. Click here for report » COMPANY NOTES PVR (PVRL IN) | Results Review Tata Global Beverages (TGBL IN) | Results Review MISC Bhd (MISC MK) | Results Review Globe Telecom (GLO PM) | Results Review Sembcorp Industries (SCI SP) | Results Review Thailand Healthcare | OVERWEIGHT Siam Makro (MAKRO TB) | Results Review PVR (PVRL IN) 1Q miss but big picture intact Share Price: INR621 | Target Price: INR746(+20%) | MCap (USD): 406M | ADTV (USD): 1M Maintain BUY with TP of INR746 based on 20x FY16F PER. We remain bullish on PVRL's superior and sustainable long-term growth, driven by its market leadership and increased penetration of multiplexes in the domestic market. 1QFY15 EBITDA margin of 15.1%, -260bps YoY, was below our forecast of 16.3%. Further, higher depreciation hurt EPS, which more than halved YoY. Revenue of INR3.6b, +8% YoY, was in line with consensus and our estimate. We expect strong uptick in revenue and EBITDA margin in 2Q/3Q on the back of a slate of big-budget movies scheduled for release (see detailed list on page 3). We factor in higher depreciation and tweak our FY15/16 EPS by -4% each. Click here for report » Tata Global Beverages (TGBL IN) 1Q in line; EPS upgrades possible Share Price: INR155 | Target Price: INR194(+25%) | MCap (USD): 1.5B | ADTV (USD): 12M Maintain BUY with Street-high TP of INR194 based on SOTP valuation (64% for India tea business, 9% each for coffee business and group investments, 18% for Tetley). 1Q EPS of INR1.7 was marginally down YoY but +70% QoQ. EBITDA was slightly under pressure (-70bps YoY) due to lower-than-expected performance of the coffee plantation business in India. We believe recovery in the India coffee business, integration of acquired MAP coffee business in Australia, and improved contribution from the water business should drive a positive surprise to our conservative EPS estimate of INR6.5 for FY15. (Full report will be out soon) MISC Bhd (MISC MK) Financial muscle for growth Share Price: MYR6.73 | Target Price: MYR7.20 (+7%) | MCap (USD): 9.4B | ADTV (USD): 4.1M Seasonally weaker 2Q results within expectations. Stronger war chest for its forte LNG business. Maintain BUY and MYR7.20 SOP-TP. Click here for report » Globe Telecom (GLO PM) High opex offset robust revenue rise Share Price: PHP1,832 | Target Price: PHP1,582 (-14%) | MCap (USD): 5.7B | ADTV (USD): 2M 2H14 core profit up 18% YoY to PHP7.6b as depreciation and other non-operating expenses fell. Service revenues rose 7% while opex and subsidies jumped 12% resulting in EBITDA growth of 1%. 1H14 core income 60% of 2014F profit but guidance is for higher 2H14 depreciation and opex. Maintain HOLD. Click here for report » Sembcorp Industries (SCI SP) Domestic power under pressure Share Price: SGD5.41 | Target Price: SGD5.03(-7%) | MCap (USD): 7.7B | ADTV (USD): 6M 2Q14 PATMI met expectations. Interim DPS of 5.0 SGD cts. Utilities suppressed by low spark spread in domestic market. Overseas contributions grew. Maintain HOLD in view of near-term domestic power price pressure. SOTP-based TP trimmed from SGD5.11 to SGD5.03 after updating components. Click here for report » Thailand Healthcare Against all odds Sector update Estimate 2Q14F sector net profit of THB2,364m, -21% QoQ on seasonal weakness but +11% YoY, representing 22% of sector FY14 forecast. Hospital revenue could be up 9% YoY. BCH could post the highest earnings growth in 2Q14. Main growth drivers are i) volume growth, ii) price hikes, iii) cost control measures. EBITDA margin is expected to expand 200bps YoY to 21.9%. Maintain OVERWEIGHT. Top Pick is BGH and upgrade BCH to BUY. HOLDs on BH and CHG. We prefer strong structural growth with robust earnings growth. Click here for report » Siam Makro (MAKRO TB) 2Q was 10% below on product mix Share Price: THB40.75 | Target Price: THB25.00(-39%) | MCap (USD): 6.1B | ADTV (USD): 0.4M Maintain SELL with a 12M price target of THB25 � DDM based with a 15% discount on low stock liquidity. Without the discount, MAKRO�s fair value is THB29. At 34.5x 2015 PE, valuation remains the key deterrent on MAKRO. 2Q14 net profit was up 10%YoY but was 10% below our estimates. Revenue growth was 11%YoY with underlying SSSG at 6.3%, a tad below our expectation of 6.7%. GM declined 20bps YoY, 60bps QoQ and this we traced to the change in merchandising mix towards lower margin dry foods (66% of sales vs 65% in 1Q14) away from the high margin non-food (11.9% of sales from 12.9% in 1Q14). Despite 2Q14 10% below our estimates we view MAKRO�s 2Q14 performance as inline. Short term changes in merchandising mix are driven by circumstances and not easy rectify (and should not be). We maintain our forecast. (Full report will be out soon) ECONOMICS Rate to normalize 2H next year External Trade, June �14 Thai Economics: Rate to normalize 2H next year THB unlikely to get lift from BoT Economics MPC members voted unanimously to keep benchmark rate at 2.00%, saying inflationary pressure remains contained and not commenting on the household debt. We expect the MPC to keep the key rate at 2.00% for the rest of this year and increase it 25bps during 2H15 to normalize the monetary stance and be in line with global and regional interest rate policy. USD/THB continues to hover in a tight range within 32.050-32.310 and is currently hovering near the mid-point of the range. There are two way risks that are pulling the pair in two directions, which should keep the pair in range-bound trades. Offers are likely to be limited still by 32.050, while upticks are likely to test the immediate hurdle at 32.245 ahead of 32.355. Click here for report » External Trade, June �14 Lost in translations�? Malaysia Economics Export and import growth slowed in June 2014. But external trade growth accelerated in 2Q 2014. No change in our full-year forecasts, which implies moderating trade growth after the strong showing YTD. (Full report will be out soon)