Regional Daily, Maybank KE (2014-08-13)

Daily 13 August 2014 TOP VIEWS Uni-President China (220 HK) | Rating Change L.P.N. Development (LPN TB) | Company Update Megaworld Corp (MEG PM) | Results Review Indonesia Consumer | UNDERWEIGHT Uni-President China (220 HK) Inflexion point to kick in; U/G to BUY as irrational competition fades Share Price: HKD6.93 | Target Price: HKD7.84 (+13%) | MCap (USD): 3.2B | ADTV (USD): 5M U/G to contrarian BUY on more disciplined A&P and CAPEX plan as well as renewed focus on product innovation. We lift our FY14-16F EPS by 47%-90% accordingly as we incorporate A&P/sales ratio of 10% (vs 13-14% previously) and much higher JV/assoc�s profit (CNY200m vs. < CNY100m before). UPC believes the soft demand growth for instant noodles & beverages in recent years is due to limited new launches and too much focus on static competition. More product diversity in the market should reverse sluggish market growth trend. While UPC note free sausage promotion is likely to be recurring, they can do it more economically. Together with new high-end products, we expect segment losses to narrow. New TP is pegged at 13X FY15F EV/EBITDA (~28X FY15 PER). Click here for report » L.P.N. Development (LPN TB) 2Q14: Weak earnings in line Share Price: THB22.60 | Target Price: THB14.00 (-38%) | MCap (USD): 1.0B | ADTV (USD): 5M Maintain SELL with Street-low TP THB14 pegged to 8.9x FY14 PE based on 6-mth view of likely weak presales and earnings in 2H14. 2Q14 profit in line with our estimate at THB367m (EPS THB0.25), collapsing 54% YoY but 15% below Bloomberg consensus estimate. Announced interim dividend of THB0.26/sh. XD date on 20 Aug. Recommend investors with over 12-mth investment horizon to wait for a correction in 2H14 for an entry point to capture strong earnings growth of 56% YoY in FY15. Click here for report » Megaworld Corp (MEG PM) Quick benefit from acquisition Share Price: PHP4.36 | Target Price: PHP5.40 (+24%) | MCap (USD): 3.2B | ADTV (USD): 7M Maintain BUY as GERI�s consolidation supports sustained strong growth and provides better margins. 1H14 net profit including GERI in line with expectation. Rental income grew fastest at 22%YoY as MEG sets market�s escalation rate of 5-7%. Click here for report » Indonesia Consumer Sector Update Is the worst over yet? Indonesia consumer confidence hit 12-mth high in Jul14 but the trend is likely to reverse in the event of fuel price increase. The impact on mass market consumption may be partially lessened by higher minimum wage increase. Retain preference on mass market consumer and food retail sub-sectors. Click here for report » COMPANY NOTES China Gas Utilities | OVERWEIGHT Media Chinese International (MCIL MK) | Company Visit Nestle Malaysia (NESZ MK) | Results Review Robinson Department Store (ROBINS TB) | Results Review Bangkok Life Assurance (BLA TB) | Results Review Ticon Industrial Connection (TICON TB) | Results Review Minor International PCL (MINT TB) | Results Review Pruksa Real Estate (PS TB) | Results Review China Gas Utilities Sector Update City gate price hike NDRC announced a city gate price hike of CNY0.4/cubic meter for non-residential users. This hike is for existing volume price only. Maintain OVERWEIGHT on sector. The timing and magnitude is quite in-line with our expectations. From last year�s experience and the price advantage to substitutes, we believe the price hike for non-residential users can be passed on to end-users. Click here for report » Media Chinese International (MCIL MK) Waiting for the inflexion point Share Price: MYR0.92 | Target Price: MYR0.92(-0%) | MCap (USD): 486M | ADTV (USD): 0.1M Adex growth will be suppressed over the next two years but significant newsprint cost savings are in the offing. Trim EPS estimates by 4-11%. That said, MCIL may be Shariah compliant again and there is alot of scope to raise dividends. Maintain HOLD call but with a trimmed TP by 10% to MYR0.92 on an unchanged 10x CY14 PER. Click here for report » Nestle Malaysia (NESZ MK) Expect a catch-up in 2H14 Share Price: MYR67.70 | Target Price: MYR64.00(-5%) | MCap (USD): 4.9B | ADTV (USD): 0.1M 1H14 results slower than normal due to higher marketing expenses and commodity prices. Price increases should however allow Nestle to play catch-up in 2H14. Maintain HOLD with an unchanged DCF-based TP of MYR64. Click here for report » Robinson Department Store (ROBINS TB) 2Q14 net profit contracted Share Price: THB58.00 | Target Price: THB53.00(-9%) | MCap (USD): 2.0B | ADTV (USD): 2M Maintain HOLD with 12M DCF based target price of THB53. Same store sales contracted 7% YoY worse than our 4-5% expectation. 1H14 net profit is 40% of FY forecast but with six new store openings in the pipeline, including one in Vietnam, 2H will make up for weak 1H. Maintain forecasts. Click here for report » Bangkok Life Assurance (BLA TB) Disappointed earnings in 2Q14 Share Price: THB92.25 | Target Price: THB100.00(+8%) | MCap (USD): 3.5B | ADTV (USD): 2M Maintain HOLD and TP of THB100, implying 19x 2015F PE, 3.9x PBV and 22% ROE. 2Q14 earnings fell 88% YoY to THB169m, below our and consensus estimates by 87%, due to huge life policy reserves (+38% YoY) and benefits payments to policyholders (+33%). Expect earnings to recover in 3Q14 due to the dividend income from investments. (FULL REPORT WILL BE OUT SOON) Ticon Industrial Connection (TICON TB) 1H slow take up, earnings downgraded Share Price: THB17.70 | Target Price: THB22.60 (+28%) | MCap (USD): 591M | ADTV (USD): 5M Maintain BUY despite dismal 2Q and 1H14 earnings prompting downgrade and lower TP of THB22.6 pegged to 5yr PBV Real estate revenue dropped 4% YoY & other income was down 50% YoY while interest expenses stayed high and unsold factories/warehouses suffered from high depreciation. 2Q145 net profit was THB5m, bringing 1H14 to THB149m, down 65% YoY and 6% of our FY forecast. 2Q14 is the bottom in the take-up for factory & warehousing but even as we pencil in improvement in demand and the high gains from the asset carve out via REITs, TICON will struggle to meet our target � hence the downgrade. (FULL REPORT WILL BE OUT SOON) Minor International PCL (MINT TB) 2Q robust and in line; Stay BUY Share Price: THB33.00 | Target Price: THB37.00(+12%) | MCap (USD): 4.1B | ADTV (USD): 9M Earnings in line with our expectation but beat consensus. 1H14 sales and earnings accounting for 49%/46% of our FY14 estimates vs. 51%/45% in 1H13. 2Q14 sales/NPAT up 10%/44% YoY, bringing 1H14 sales/NPAT growth to 10%/11% YoY. EBITDA margin was 17.3% (+140bps YoY), food and hotel business showed better EBITDA margin. Maintain BUY on: i) earnings recovery; ii) lift martial law; iii) potential consensus earnings upgrade. DCF-based TP THB37 implies 26.5x PER, 4.5x P/BV and 1.1x PEG for FY15F. (FULL REPORT WILL BE OUT SOON) Pruksa Real Estate (PS TB) 2Q14: Beat consensus by 17% Share Price: THB34.00 | Target Price: THB27.00(-21%) | MCap (USD): 2.3B | ADTV (USD): 4M Maintain HOLD with TP under review. We will revisit our assumptions after the analyst meeting on 13 Aug. 2Q14 net profit of THB1,871m (EPS THB0.84), up 76% QoQ and 33% YoY; Beat Bloomberg consensus by 17% on stronger-than-expected gross margin. 37 projects launched in 1H14 worth c.THB31b; Plans to launch 33 projects in 2H14 worth THB39b bringing total new launches this year to THB70b, up from THB50b initially. Click here for report » ECONOMICS Singapore GDP Final 2Q 2014 Slightly better vs. advanced estimates Final 2Q 2014 GDP came in better than advanced estimates, while 1Q 2014 numbers were revised upwards. Our full-year growth forecast is cut to +3.3% from +3.7%. Official real GDP growth forecast adjusted to 2.5%-3.5% from 2.0%-4.0%. Click here for report »