Regional Daily, Maybank KE (2014-09-18)

Daily 18 September 2014 TOP VIEWS Macau Gaming | OVERWEIGHT Regional Materials Bumi Resources Minerals (BRMS IJ) | Company update Macau Gaming History on the side of optimism Resume coverage Resuming coverage at OVERWEIGHT. Top Picks: Galaxy, Sands China. Other BUYs: MGM China, Wynn Macau. Macau GGR growth to accelerate from 1% in 2014 to 15% in 2015 and further to 18% in 2016, in our view. Catalysts are improving liquidity, stabilising property prices in China and new casinos. Worst has likely passed Click here for report » Regional Materials Gems, Picks & Shovels Sector update Chinese coal stocks are getting a boost from State measures to reduce production and limit coal imports. We continue to call for a moderate 5% increase in prices in China by year-end, with increases of 3-4% per year in China and the region during 2015 and 2016. Our top picks are Shenhua (1088 HK; TP HKD25) and China Coal (1898 HK; TP HKD5.50). Metals prices remain vulnerable to USD strength and lackluster growth data from China. The recent injection of liquidity by the PBOC is more to provide liquidity to avoid a credit crunch and less broader stimulus. We continue to favor nickel and copper with top picks VALE Indonesia (INCO IJ; TP IDR4,800), Nickel Asia (NIKL PM; TP PHP51.17), and copper growth play MMG (1208 HK; TP HKD3.40). We see downside risk to aluminum and steel prices in China due to oversupply. We reiterate our Sell ratings on Angang Steel (347 HK; TP HKD4.00) and Chalco (2600 HK; TP HKD3.20). Aluminum production restarted in China as prices recently approached the CNY15,000/t level incl. VAT (USD2,084/t excluding 17% VAT) where over two-thirds of smelters are profitable. Click here for report » Bumi Resources Minerals (BRMS IJ) Progress in asset monetisation Share Price: IDR413 | Target Price: IDR560 (+36%) | MCap (USD): 883M | ADTV (USD): 0.7M Maintain BUY & SOTP TP of IDR560. Valuations undemanding against peers. Catalysts are BRMS�s ownership change and project progress. Continues to monetise Dairi and Gorontalo projects. Citra Palu Minerals another asset for development upon JORC certification. Click here for report » COMPANY NOTES China Merchants Holdings (144 HK) | Company Update Jollibee Foods (JFC PM) | Company Update Khon Kaen Sugar (KSL TB) | Results Review Tech-Tracks China Merchants Holdings (144 HK) Strengthening overseas footprint Share Price: HKD25.05 | Target Price: HKD29.55 (+18%) | MCap (USD): 8.2B | ADTV (USD): 16M Reiterate BUY though prefer COSCO Pacific (1199.HK, TP HKD13.30) for stronger port-earnings growth. Second port investment in Sri Lanka to boost overseas portfolio. Near-term contributions unlikely. Comfortable financing given 12.9% gearing in FY14E. TP still at HKD29.55 (12-month forward NAV). Catalysts from further port acquisitions and ramp-up of new projects. Click here for report » Jollibee Foods (JFC PM) Coping well even in tougher times Share Price: PHP191.80 | Target Price: PHP210.00 (+9%) | MCap (USD): 4.6B | ADTV (USD): 2M Sustaining robust same-store-sales growth so far in 3Q14. Price hike this month to mitigate higher costs; purchase of trucks to boost logistical capabilities. TP unchanged at PHP210 even after forecasts rolled over to 2015F. Maintain BUY. (Full report will be out soon) Khon Kaen Sugar (KSL TB) 3Q14 dismal but it is history Share Price: THB13.30 | Target Price: THB16.00 (+20%) | MCap (USD): 703M | ADTV (USD): 0.3M Maintain BUY: Despite poor 3QFY14 profits & mild under-performance in its share price, we remain positive on KSL on expectations of a 2015 recovery. At current levels, its share price should be well-supported by 4-5% dividend yields. 3QFY14 net profit dropped as sugar sales in value & volume fell due to shipment delays. 3Q�s weakness was an anomaly from the normal high season. 9MFY14 revenue and net profit accounted for 45% and 65% of our full-year forecasts. We are keeping our estimates as we expect 4Q to be strong (also abnormal), due to high shipments Click here for report » Tech-Tracks Most markets peaked in early September Regional Quants Markets in Hong Kong and Asia ex-Japan made key highs in early September. Equity markets remain in lacklustre trading mode as they await the outcome of the September US FOMC meeting. Top SELL: Petronas Dagangan Berhad (PETD MK) Top BUYs: China LNG Group Limited (931 HK), 800 Super Holdings Ltd (ESH SP), PT Tiphone Mobile Indonesia Tbk (TELE IJ), Interlink Communication PCL (ILINK TB), Nickel Asia Corporation (NIKL PM) and Petroleum Equipment Assembly and Metal Structure Co Ltd (PXS VN). Click here for report » ECONOMICS Thailand Economics Singapore Economics Malaysia Economics Contained inflation still cools rate rise call Rate to normalize 2H next year Economics MPC members voted unanimously to keep benchmark rate at 2.00%, saying the current degree of monetary accommodation is still needed. The fact that inflationary pressure remains contained helps cool next year�s rate increase expectations; we expect a 25bps increase, but not until 2H15. We maintain our forecast for the USD/THB to end the year at 31.80. The pair is expected to hover around that level by end-1Q 2015 before accelerating to 32.00 by end-2Q, and ending 2015 at 32.20. Click here for report » Singapore Exports, Aug �14 Pleasant surprise Economics NODX in August 2014 surprised on the upside as it expanded by +6.0% YoY in Aug 2014 (Jul 2014: -3.3% YoY). Growth was boosted by non-electronics (Petrochemicals and Pharmaceuticals) as South Korea and Taiwan were the major drivers by destination. Electronics exports continued to be sluggish with only IC parts posting positive growth. Click here for report » Malaysia CPI, Aug 2014 Edging up but stable Economics Inflation rate remained firmed in Aug 2014 at +3.3% YoY from +3.2% YoY posted in July 2014. Our measure of core inflation (excluding the key subsidised components of CPI) was stable at +2.1% YoY (July 2014: +2.1% YoY). Keeping our full-year inflation rate forecast of +3.5% for now (YTD 2014: 3.3% YoY). Click here for report »