Regional Daily, Maybank KE (2014-08-27)

Daily 27 August 2014 TOP VIEWS China Foods (506 HK) | TP Revision COSCO Pacific (1199 HK) | Results Review HanKore Environment Tech (HANKORE SP) | TP Revision Inari Amertron (INRI MK) | Results Review China Foods (506 HK) Silver lining; Turnaround and more Share Price: HKD3.25 | Target Price: HKD3.80 (+17%) | MCap (USD): 1.2B | ADTV (USD): 2M Maintain BUY on solid cuts in excess inventory and sustainable sales/cost efficiency enhancements led by new market-oriented mind-set. We believe CF is well on track to achieve turnaround in 2015F and narrowing losses in 2H14. Will focus on rectifying its poor POS efficiency and coverage in 2H14F after fixing the inefficient SG&A in 1H14. A dedicated team has been set up to monitor end-point sales and execution with monthly communication to headquarters. Keep our TP of HKD3.80 intact at 1.7x P/BV and roll over our valuation basis to FY15F from FY14/15F. We lift our EPS for FY15-16F by 5%-6% though delay turnaround to FY15F. Click here for report » COSCO Pacific (1199 HK) Steadily sailing ahead Share Price: HKD11.40 | Target Price: HKD13.30 (+17%) | MCap (USD): 4.3B | ADTV (USD): 5M Reiterate BUY with HKD13.30 TP as we expect the market to react positively to the improvement in 1H14 port earnings (+17.5% YoY). Best play in China port sector. Forecast 8% recurrent earnings growth for FY14 and 12% for FY15 after we fine-tune our forecasts given the in-line results. Low FY14F gearing of 33% provides room for value-enhancing acquisitions, suggesting earnings upgrade potential. Click here for report » HanKore Environment Tech (HANKORE SP) Operationally unscathed Share Price: SGD0.89 | Target Price: SGD1.14 (+28%) | MCap (USD): 364M | ADTV (USD): 5M Stripping out accounting changes and one-offs, underlying business solid in 4QFY6/14. FY6/14 normalised PBT growth in line. Change from SFRS to IFRS to hurt short term but benefit longer term. Maintain BUY with slightly lower TP of SGD1.14 (30x FY6/15E P/E) from SGD1.23, after EPS adjustments. Click here for report » Inari Amertron (INRI MK) The best is yet to come Share Price: MYR3.23 | Target Price: MYR4.20 (+30%) | MCap (USD): 0.6B| ADTV (USD): 2.6M FY6/14 core net profit tracked our/consensus expectations. Better results beginning 1QFY6/15 underpinned by (i) ramp up in RF production for Avago�s increased requirements and (ii) more meaningful contribution from ISK and Ceedtec. Reiterate BUY with an unchanged MYR4.20 cum-rights TP (17x CY15 PER), offering 30% upside. Click here for report » COMPANY NOTES Agile Property (3383 HK) | Company Update Want Want China (151 HK) | TP Revision Hong Leong Bank (HLBK MK) | Results Review Hong Leong Financial Group (HLFG MK) | Results Review IJM Corporation (IJM MK) | Results Review TSH Resources (TSH MK) | Results Review Icon Offshore (ICON MK) | Company Update Sarawak Oil Palms (SOP MK) | Results Reivew Carlsberg Brewery Malaysia (CAB MK) | Results Review GT Capital (GTCAP PM) | Results Review Cordlife Group (CLGL SP) | Results Review Bumrungrad Hospital (BH TB) | TP Revision Hemaraj Land & Development (HEMRAJ TB) | Rating Change Agile Property (3383 HK) Risk reward favourable to upside Share Price: HKD6.19 | Target Price: HKD8.10 (+31%) | MCap (USD): 2.8B | ADTV (USD): 9M Maintain BUY with unchanged TP of HKD8.10 (+31% potential upside). We believe Agile�s risk-reward is favourable to the upside, and this year�s presales ASP levels should trough in June-August at approx. CNY8k/sq m. 1H14 GPM was 35.4% and management guides FY14 GPM at 33% and flattish next year, which is above our unchanged forecast of 29.9%. Expect lacklustre August presales, flattish MoM. However, Sept� Oct sales to pick up, and there will be a total of 12 new launches in 2H vs. 4 in 1H. Typically, Nov and Dec presales ASP should rise due to high season of Hainan sales kicking in again. Management�s 2014 presales target remains at CNY48b, while our forecast is unchanged at CNY46b. 1H14 results were in-line with core profit at CNY1.74b, up 12% YoY, representing 38% of Bloomberg consensus full year estimates. Valuation is cheap at 64% discount to NAV, 3.5x PER and 0.5x P/B for FY15 and 8% fwd dividend yield. Click here for report » Want Want China (151 HK) Still at a good margin of safety Share Price: HKD10.36 | Target Price: HKD12.80 (+24%) | MCap (USD): 17.7B | ADTV (USD): 22M Maintain BUY with new TP of HKD12.8 pegged at 25x FY15F PER. Cut FY14-16F EPS by 3%-12% on weak sales growth outlook. However, increased focus on pushing non-star products and developing new products are key bright spots. GPM & S&GA cost control was respectable in 1H14 despite challenging environment which we believe is due to its channel & scale strength. Good cheap NZ milk powder cost stock up in 1H bode well for FY15F margins, in our view. We believe WWC�s strong fundamentals warrant valuation premium despite slower growth. Worth noting children�s milk is still a growing item while WWC has renowned and differentiated offerings in its rice crackers & snack foods. Click here for report » Hong Leong Bank (HLBK MK) A decent end to the financial year Share Price: MYR14.00 | Target Price: MYR16.20 (+16%) | MCap (USD): 8.2B | ADTV (USD): 2M FY14 results within expectations with net profit up a decent 13% YoY to MYR2.1b. Targeting loan growth of 10% in FY15, NIM above 2%. BUY � MYR16.20 TP maintained on unchanged CY14 P/BV target of 1.9x, supported by ROEs of ~15%. Click here for report » Hong Leong Financial Group (HLFG MK) Strong insurance earnings Share Price: MYR17.04 | Target Price: MYR19.10 (+12%) | MCap (USD): 5.7B | ADTV (USD): 1M FY14 results above expectations with net profit up 15% YoY to MYR1.7b. Strong earnings growth expected from insurance division as it shifts to more profitable investment-linked products. BUY � SOP derived TP raised to MYR19.10 from MYR17.30. (FULL REPORT WILL BE OUT SOON) IJM Corporation (IJM MK) Delivering steady growth Share Price: MYR6.57 | Target Price: MYR7.40 (+13%) | MCap (USD): 3.1B | ADTV (USD): 7M 1QFY3/15 results met our estimate but below consensus�. Strong construction order book, high unbilled property sales and strong FFB production will support earnings growth. Reiterate BUY at a higher MYR7.40 RNAV-based TP (+20sen). Click here for report » TSH Resources (TSH MK) Outperformed, upgrade to BUY Share Price: MYR3.22 | Target Price: MYR3.70 (+15%) | MCap (USD): 920M | ADTV (USD): 1M 2Q14 results were above our and Street estimates. 1H14 FFB production (+28% YoY) was higher than expected. Revise FFB output forecasts and raise FY15 net profit (+7%). TP raised to MYR3.70 (+9%). Upgrade to BUY; 15% upside. Click here for report » Icon Offshore (ICON MK) Delivery blip; eyes regional markets Share Price: MYR1.78 | Target Price: MYR2.00 (+12%) | MCap (USD): 0.7B | ADTV (USD): 3.7M Trim FY14 net profit forecast by 4% to account for delivery delays for 2 new OSVs (PSV: Icon Piai 2 and FCB: SWATH). Targets Indonesia as its next destination for an OSV footprint � likely via a JV and/or M&A. Maintain BUY and MYR2.00 TP (15x 2015 PER, comparable to peer average). Click here for report » Sarawak Oil Palms (SOP MK) Accumulate on weakness Share Price: MYR6.00 | Target Price: MYR6.90 (+15%) | MCap (USD): 833M | ADTV (USD): 0.1M 2Q14 core net profits were within expectations. We lower 2014 earnings by 12% on lower CPO ASP, lower refining margins and delayed biodiesel contributions. Stock price corrected by 15% from its recent peak; this presents an opportunity to BUY. TP unchanged at MYR6.90. Click here for report » Carlsberg Brewery Malaysia (CAB MK) A decent quarter, results in line Share Price: MYR12.10 | Target Price: MYR12.40 (+2%) | MCap (USD): 1.2B | ADTV (USD): 0.4M 1H14 results were within expectations. The group�s dynamic brand portfolio to cushion weaker consumer sentiment, increasing focus on cost efficiency. Maintain HOLD with a DCF-based TP of MYR12.40. Click here for report » GT Capital (GTCAP PM) Earnings recovery in 2Q14 Share Price: PHP924.00 | Target Price: PHP885.00 (-4%) | MCap (USD): 3.7B | ADTV (USD): 2M Maintain HOLD, NAV raised to PHP885 following 3% increase in MBT�s fair value to PHP95/sh. 2Q14 net earnings grew 7% YoY and 28% QoQ to PHP2.2b. TMP, GBP, and FedLand drove earnings upturn. (FULL REPORT WILL BE OUT SOON) Cordlife Group (CLGL SP) Raising its bet on China Share Price: SGD1.27 | Target Price: SGD1.50 (+18%) | MCap (USD): 272M | ADTV (USD): 0.4M FY6/14 core EPS (+23% YoY) below by 8%. Still, maintain BUY. TP raised to SGD1.50 from SGD1.43, based on SOTP. Numerous positives await in FY6/15E. More new products in more markets. Stronger contributions from China. Raises China bet by buying CCBC�s CBs, though this may raise some eyebrows. (FULL REPORT WILL BE OUT SOON) Bumrungrad Hospital (BH TB) Rising competition & rich valuation Share Price: THB135.00 | Target Price: THB130.00 (-4%) | MCap (USD): 3.1B | ADTV (USD): 4M Management trims 2014F revenue growth from 10-13% to 7-10% due to lower-than-expected foreign patient growth. It maintains EBITDA margin target at 27-28% for 2014. Petchburi project (220 beds) has been delayed for a year due to EIA issues. Medium outlook driven by price adjustments rather than volume growth. Maintain HOLD with new DCF-based TP of THB130, implying 35x PER, 7x P/BV, and 1.5x PEG for 2015F. Positive news already priced-in. Competition is rising. We prefer BGH (TP THB22). Click here for report » Hemaraj Land & Development (HEMRAJ TB) Limited upside; D/G to HOLD Share Price: THB4.34 | Target Price: THB4.80(+11%) | MCap (USD): 1.3B | ADTV (USD): 5M Downgrade to HOLD as the upside to our target price is only 11%. We also remove HEMRAJ from our Top 10 Stock Picks and replace it with WHA (12M TP of THB47 with 33% upside). A good story well-told. We continue to like HEMRAJ, its business strategy and management execution record. However, at this point we cannot trend what could lead to a material upgrade to our earnings/cashflow estimates. The short term risk on FDI has abated as the BOI functioning has normalised. However, we do not expect approvals to deliver exceptional numbers. Click here for report » ECONOMICS Singapore Economics Singapore IPI, Jul �14 Narrow-base pick up Industrial output YoY growth picked up to a three-month high. Higher biomedical and chemicals output offset lower production in Transport Engineering, Electronics and General Manufacturing Industries. Output growth is likely to remain �choppy� amid uneven global economic expansion Click here for report »