Regional Daily, Maybank KE (2014-08-15)

Daily 15 August 2014 TOP VIEWS Regional Materials SingTel (ST SP) | Results Reivew Inari Amertron (INRI MK) | Company Update Regional Materials Sector Update Gems, Picks & Shovels Consensus expectations appear too high for the earnings of Chinese thermal coal and steel companies. Reiterate SELL on China Coal (1898 HK; HKD5.02; SELL) and Angang Steel (347 HK; HKD5.79; SELL). CISA warns of continued challenges for the Chinese steel industry with capacity at 1.1bt. � We see better fundamental support for nickel, zinc, and copper. VALE Indonesia (INCO IJ; IDR4,100; BUY; TPIDR4,600) should get a boost as nickel prices rise next year to our forecast USD9.50/lb (+19% YoY, 12% above consensus). The current trend of inventory de-stocking in China should end later this year. � For copper exposure, we like high-beta play Jiangxi Copper (358 HK; HKD14.70; BUY; TPHKD15). Our top regional small-cap copper play is Atlas Mining (AT PM; PHP16.80; BUY; TP19.72). Click here for report » SingTel (ST SP) Stable outlook Share Price: SGD3.91 | Target Price: SGD4.32 (+10%) | MCap (USD): 49.9B | ADTV (USD): 3.8M Singapore consumer business outperformed, offsetting a weak Optus in Australia under restructuring. Singapore mobile continued to do well. Optus�s mobile turning around. Maintain BUY and SOTP-based TP of SGD4.32. Forecasts largely maintained. Catalysts include Optus�s turnaround. Click here for report » Inari Amertron (INRI MK) Sowing seeds for future growth Share Price: MYR3.20 | Target Price: MYR4.20 (+31%) | MCap (USD): 0.6B | ADTV (USD): 2.6M Positive on Inari�s land purchase in Batu Kawan. Expect another acquisition in the near term to boost production capacity to meet Avago�s rising demand. Reiterate BUY with an unchanged MYR4.20 cum-rights TP (17x CY15 PER). Click here for report » COMPANY NOTES Media Prima Bhd (MPR MK) | Company Update Filinvest Land Inc. (FLI PM) | Results Review Philippine National Bank (PNB PM) | Results Review Sino Grandness (SFGI SP) | Company Update Genting Singapore (GENS SP) | Results Review Courts Asia (COURTS SP) | Company Update AP (Thailand) (AP TB) | Company Update Bangkok Dusit Medical Services (BGH TB) | Results Review CH. Karnchang (CK TB) | Results Review Italian-Thai Development (ITD TB) | Results Review Media Prima Bhd (MPR MK) Washout quarter Share Price: MYR2.39 | Target Price: MYR2.16(-10%) | MCap (USD): 826M | ADTV (USD): 1.0M MPR�s 2Q14 results were below expectations � 1H14 adex at every segment fell YoY, save for two. Adex should recover in 2H14 as consumers are cajoled into purchasing durable goods before GST. Maintain HOLD but lower TP by 15% to MYR2.16. Click here for report » Filinvest Land Inc. (FLI PM) Sustained project roll-out Share Price: PHP1.53 | Target Price: PHP2.50 (+63%) | MCap (USD): 846M | ADTV (USD): 0.6M Net income grew 14.8% YoY in 1H14 driven by stronger real estate sales and rental incomes. Slight GPM erosion but we expect improvement once project launches for middle-income segment is booked. Maintain BUY and TP of PHP2.50 as we expect stronger performance in 2H14 due to commercial operations of new offices and additional project launches. (FULL REPORT WILL BE OUT SOON) Philippine National Bank (PNB PM) Better treasury boosts earnings Share Price: PHP90.00 | Target Price: PHP109.00 (+21%) | MCap (USD): 2.6B | ADTV (USD): 1M Still a BUY with 21% upside to TP of PHP109, at 1.5x PBV. 1H14 earnings beat our expectations on better trading gains. Remains an attractive acquisition target. (FULL REPORT WILL BE OUT SOON) Sino Grandness (SFGI SP) Wait for more clarity Share Price: SGD0.75 | Target Price: SGD0.76(+2%) | MCap (USD): 351M | ADTV (USD): 1.0M Prospective investor in talks with company to acquire substantial stake. Short-term positive. Could ease market jitters over liquidity. Not over-excited pending details. Maintain HOLD and TP of SGD0.76. Click here for report » Genting Singapore (GENS SP) Caught the China cold Share Price: SGD1.28 | Target Price: SGD1.24 (-3%) | MCap (USD): 12.5B | ADTV (USD): 10M 2Q14 results were within expectations. That said, 2Q14 VIP volume fell sharply QoQ and bad debts hit a new high. Expect future quarters to continue to be weak due to continued tight credit conditions in China. Our estimates are little changed. Maintain HOLD with an unchanged TP of SGD1.24 on 10x FY14E EV/EBITDA. (FULL REPORT WILL BE OUT SOON) Courts Asia (COURTS SP) No improvement yet Share Price: SGD0.52 | Target Price: SGD0.60 (+15%) | MCap (USD): 233M | ADTV (USD): 0.1M Coverage transferred to Truong Thanh Hang. The retail environment in Singapore and Malaysia is still lacklustre, due to poor consumer sentiment. Bottom-line further hit by rising expenses partially linked to Courts� expansion throughout the region Expansion strategy in Indonesia with opening of three stores by end-FY3/15. However, Courts expects to turn a profit only from 2016. Maintain HOLD. (FULL REPORT WILL BE OUT SOON) AP (Thailand) (AP TB) Strong presales support rerating Share Price: THB7.20 | Target Price: THB8.00 (+11%) | MCap (USD): 644M | ADTV (USD): 5M Maintain BUY and raise TP of our sector top pick to THB8.0 (from THB7.5) following earnings adjustment of 5.3 in FY14 and 6.0% in FY15. 2Q14 net profit was up 174% QoQ and 57% YoY to THB712m (EPS THB0.25), beating our and Bloomberg consensus forecasts by 11% and 18%. AP raises revenue target to THB22b (from THB21b), in line with our forecast, after seeing good momentum and record-high landed property sales. Click here for report » Bangkok Dusit Medical Services (BGH TB) Within expectation, strong ahead Share Price: THB18.80 | Target Price: THB22.00 (+17%) | MCap (USD): 9.1B | ADTV (USD): 23M Earnings in-line with our and market expectation. 1H14 sales and earnings accounted for 48%/51% of our FY14 estimates vs. 49%/52% in 1H13 and 48%/50% for consensus. 2Q14 sales/NPAT increased 9%/7% YoY, bringing 1H14 sales/NPAT growth to 11%/7% YoY. EBITDA up 20% YoY with margin at 19.6% (+166bps) thanks to cost control measures. Maintain BUY with DCF-based TP of THB22, implying 37x PER, 6x PB/V, and 1.3x PEG for 2015F. Medium to long-term outlook remain solid. Short-term also strong. Click here for report » CH. Karnchang (CK TB) 2Q14: Beat estimates Share Price: THB27.25 | Target Price: THB32.00 (+17%) | MCap (USD): 1.4B | ADTV (USD): 36M Reiterate BUY with SOTP-based TP of THB32; expect CK to have the most new projects signed this year and bright outlook for its listed subsidiaries to support further re-rating. 2Q14 earnings of THB312m (EPS THB0.18) beat our estimates (THB151m) and Bloomberg consensus (THB265m) due to significant lower-than-expected interest expenses. Maintain positive outlook on the construction industry. Bidding on projects worth THB86b should start in 4Q14 (Dark Green Line, Double Track and Suvarnabhumi Phase II). Click here for report » Italian-Thai Development (ITD TB) Bright outlook offset weak result Share Price: THB5.20 | Target Price: THB6.00 (+15%) | MCap (USD): 790M | ADTV (USD): 24M Maintain BUY, TP THB6.0 based on 2.4x PBV in FY14; Prime beneficiary from upcoming infrastructure investment. Bright prospects on the construction industry outweigh weak results. 2Q14 net profit was at THB50m (EPS THB0.01), down 68% QoQ and 44% YoY, below our and Bloomberg consensus estimates by 71%. Expect continuous positive news flow for the construction industry which is a key share price catalyst. Click here for report »