Regional Daily, Maybank KE (2014-10-01)

Daily 01 October 2014 TOP VIEWS PetroVietnam Technical Services (PVS VN) | Initiation Philippines Strategy | OVERWEIGHT Summarecon Agung (SMRA IJ) | Company update Astra International (ASII IJ) | Rating change PetroVietnam Technical Services (PVS VN) Country�s main O&G services provider Share Price: VND40,200 | Target Price: VND64,000 (+59%) | MCap (USD): 877M | ADTV (USD): 9.1M Initiate at BUY for under-researched stock w/ VND64,000 TP. Full chain services provider for Vietnam�s E&P activities. Capable of serving O&G fields at all stages of development. Vietnam�s biggest FSO/FPSO contractor; with a dominating 95% of the local OSV market, the two segments account for 56% of total profit. Major EPC contractor for offshore mechanical construction projects. Anticipate growth in E&P activities associated with high demand for related services. Sustainable LT growth secured by positive industry fundamentals and legal framework. Click here for report » Philippines Strategy Models tweaked but winners stay Strategy PSEi up 7% since last strategy report. Model portfolio up 31% YTD, outperforming index by 8ppts. Maintain OVERWEIGHT. Growth story intact despite political sideshows while logistical problems have stopped worsening. No change in sector preferences: property and consumer. Replace RCB and DNL with RRHI and ABS. Click here for report » Summarecon Agung (SMRA IJ) Still bucking the trend Share Price: IDR1,215 | Target Price: IDR1,650 (+36%) | MCap (USD): 1.4B | ADTV (USD): 3M SMRA booked pre-sales of IDR2.58t as of Aug-14; making up 57% of company�s and our FY14 pre-sales target of IDR4.5t. The successful launch of Kensington apartment (middle-up) on 27 Sep 14 added IDR606b to its pre-sales of IDR3.19t. SMRA has only sold houses and apartments this year, which represent the real property demand from the middle segment. Maintain BUY. Top Pick in residential sector. TP IDR1,650. Expect SMRA to remain resilient in a challenging market. Click here for report » Astra International (ASII IJ) Running out of gas; D/G to SELL Share Price: IDR7,050 | Target Price: IDR5,500 (-22%) | MCap (USD): 23.5B | ADTV (USD): 18M We downgrade Astra to SELL from BUY and cut earnings by 20%-27% in 2015F-16F. Our earnings forecast is now 17% below consensus. Lower TP to IDR5500 from IDR8000. Auto sales have started to slow down, competition pressure persists and upcoming fuel-price hike will further hurt sales. Its heavy equipment and auto financing are also facing headwinds as volume growth disappears. Click here for report » COMPANY NOTES Regional Plantation | NEUTRAL MY Utilities | NEUTRAL MY Banking | NEUTRAL Singapore Banks | NEUTRAL Regional Plantation New ownership rule not retroactive Sector Foreign companies with existing Indonesian plantation operations will not be affected by Indonesia�s new rule. If foreign limit is set too low, we expect new planting to slow in Indonesia and help boost CPO price in the long term. Neutral impact for now.Maintainour12M NEUTRAL view on the sector. (Full report will be out soon) MY Utilities A relook at reserve margins Sector Peninsular Malaysia�s reserve margin would drop below 20% in 2014-2020 (from 30% in 2013). Reserve margin could fall further to 10% if some of the new plants are indeed delayed; extending expiring SLAs/PPAs appears the most convenient fix. New capacity will be required beyond 2020; IPPs would benefit if PPA terms become less onerous. Click here for report » MY Banking Loan growth stable in August Sector Industry loan growth was stable at 8.6% YoY in August; our 2014 loan growth forecast of 8.7% maintained. Of concern is that deposit growth continued to slip further to 5.6% YoY � this will intensify deposit competition. NEUTRAL on sector; BUYs are AFG, HL Bank and HLFG. (Full report will be out soon) Singapore Banks Slightly more cheerful August Sector Industry loan growth improved to 11.8% YoY in August from July�s 10.8%. Stronger business loans (+15.9%) cushioned persistently weak consumer loans (+5.8%). SGD deposit growth strengthened 1.0% MoM & 1.1% YoY, still paltry. SGD LDR inched up to 86.7%. Remain NEUTRAL on banks. DBS our top sector pick. Click here for report » ECONOMICS Thailand Economics: Consumption slipped Consumption slipped Last hope in 4Q14 Economics Private Consumption Index (PCI) reversed to -0.80% YoY in August, from 0.30% in July (the first positive figure since October). Private Investment Index further fell to -5.60%, from -3.60% in July. Central bank still thought the Thai economy continued to improve on the back of domestic demand and tourism sector. We believe govt's short-term stimulus measures could further help economy achieve V-shaped recovery in 4Q14 and grow at least 2.00% this year. But might need more medium-term stimuli to continue recovery this year and into the next. Click here for report »