Regional Daily, Maybank KE (2014-10-15)

Daily 15 October 2014 TOP VIEWS TSMC (2330 TT/TSM US) | Rating change Singapore Commodity Traders | NEUTRAL Indonesia Construction Sector | OVERWEIGHT Bank Negara Indonesia (BBNI IJ) | Company visit TSMC (2330 TT/TSM US) Price reflects concerns: U/G to HOLD Share Price: TWD121.00/USD19.67 | Target Price: TWD120.00/USD20.00 | MCap (USD): 103.2B | ADTV (USD): 460M Upgrade to HOLD as stock has reached our TP of TWD120 (2.6x P/BV or 12x PER), reflecting challenges facing the co. 3Q14 results and 4Q14 outlook are likely to be strong, which may support near-term share price but ... ...a potentially weaker-than-seasonal 1Q15 outlook and keen competition in 14nm node could cap upside potential. Click here for report » Singapore Commodity Traders 3Q14 results preview Sector update Neutral maintained, given lack of near-term catalysts. Wilmar (BUY, TP SGD4.08) our sector pick. Could make strong QoQ recovery on better sugar & soybean-crushing operations. Noble�s (HOLD, TP SGD1.47) agri division may surprise nicely but Energy & Metal margins could be weak. Olam�s (HOLD, TP SGD2.52) Jul-Sep quarter typically its trough, at 10% of full-year core net profit. Click here for report » Indonesia Construction Sector Marketing takeaways Sector update Maintain OVERWEIGHT on sector; PTPP remains our Top Pick. We sense that investors are currently neutral to slightly positive on the construction sector as overhang emerged from the recent development in domestic politics. Potential share-price correction on higher fuel prices should be temporary, given positive structural reform on higher budget allocation for infrastructure. Click here for report » Bank Negara Indonesia (BBNI IJ) NDR feedback Share Price: IDR5,275 | Target Price: IDR5,800 (+10%) | MCap (USD): 8.1B | ADTV (USD): 11M We met 25 clients on our two-day NDR in KL and HK last week. Interest in Indonesia�s banks seems to remain strong, with preference for big players such as BBNI. Some investors have trimmed their position in BBNI and currently look to re-enter as the bank has among the best fundamentals in the sector with attractive valuation. Main topics discussed: progress after 1H14, OJK�s agenda in capping interest rates, and 2015 outlook including the possibility of M&A. Click here for report » COMPANY NOTES CNOOC (883 HK) | Company update IndusInd Bank (IIB IN) | Rating change Vale Indonesia (INCO IJ) | Results preview Jasa Marga (JSMR IJ) | Flash Note Top Glove (TOPG MK) | Results review Bursa Malaysia (BURSA MK) | Company update Concepcion Industrial Corp (CIC PM) | Results preview TMB Bank (TMB TB) | TP Revision CNOOC (883 HK) OPEC: To cut or not to cut? Share Price: HKD12.52 | Target Price: HKD14.44 (+15%) | MCap (USD): 72.0B | ADTV (USD): 116M Reiterate HOLD despite share-price weakness. Investors will likely remain on the sidelines until next OPEC meeting in November for clarity on production quotas. Based on our DCF analysis, we believe CNOOC�s share price is discounting USD97/bbl long-term Brent crude oil price, vs the USD94/bbl indicated by forward curve on Bloomberg and our current assumption of USD100/bbl. If oil price remains at USD90/bbl for next 12 months, there will be almost 30% downside to our earnings estimates. Click here for report » IndusInd Bank (IIB IN) Fairly priced; D/G to HOLD Share Price: INR635 | Target Price: INR700 (+10%) | MCap (USD): 5.5B | ADTV (USD): 8M Cut to HOLD with unchanged TP of INR700. Lofty valuations have factored in the positives of strong earnings growth. Stock trading at 2.8x FY16 P/BV, which is at the upper end of long-term valuations. EPS growth of 30% YoY for 2QFY15 was consistent with expectations. Non-interest income remains key driver for EPS growth. Above industry loan growth (22% YoY) is driven by wholesale assets. NIM moderated slightly but will witness expansion on change in loan mix and CASA improvement. Click here for report » Vale Indonesia (INCO IJ) Expect another shiny quarter Share Price: IDR3,660 | Target Price: IDR4,800 (+31%) | MCap (USD): 3.0B | ADTV (USD): 4M Reiterate BUY & IDR4,800 TP (1.9x PBV). Still expecting nickel supply deficit next year. 3Q14 EPS to be strong on better nickel prices. Should meet our FY14 even if prices average USD16,000/tonne. Also to benefit from oil-price weakness. Fuel at c.35% of its production cash costs. Click here for report » Jasa Marga (JSMR IJ) Marginal impact from JORR S Share Price: IDR6,075 | Target Price: IDR7,000 (+15%) | MCap (USD): 3.4B | ADTV (USD): 3M We recently had conference call with JSMR for more clarity on recent news on JORR S. Gov�t decision was for JSMR to have formal agreement on resolution for compensation and operation of JORR S with MNB. In the worst case, impact will be marginal for 2014 as income generation from JORR S has been segregated and put into an escrow account since 2013. Contribution to revenue from JORR S was marginal, 4% in 2013 and 2.8% in 1H14, suggesting full incorporation in our 2014 forecast. Maintain BUY with unchanged TP of IDR7,000. Click here for report » Top Glove (TOPG MK) Lacking bright prospects Share Price: MYR4.88 | Target Price: MYR4.70 (-4%) | MCap (USD): 929M | ADTV (USD): 0.8M FY8/14 results within our expectations but below consensus. Expect below-peers FY14-17 earnings growth on its cautious nitrile capacity expansion and soft demand for latex gloves. Maintain HOLD and TP of MYR4.70 (15x CY 15 PER). Click here for report » Bursa Malaysia (BURSA MK) Capital management potential still Share Price: MYR8.00 | Target Price: MYR8.00 (+0%) | MCap (USD): 1.3B | ADTV (USD): 1M 9M14 results should meet expectations. No change to our earnings forecasts and MYR8.00 TP. Maintain HOLD for its capital management potential. Click here for report » Concepcion Industrial Corp (CIC PM) Expect lower 3Q14 growth Share Price: PHP40.00 | Target Price: PHP46.00 (+15%) | MCap (USD): 233M | ADTV (USD): 0.1M We expect earnings growth slowed to 15-20% in 3Q14. Still on track to meet 25% earnings growth for 2014F. Maintain BUY with forecasts and PHP46 TP unchanged. (Full report will be out soon) TMB Bank (TMB TB) All good except valuation Share Price: THB3.02 | Target Price: THB3.00(-1%) | MCap (USD): 4.0B | ADTV (USD): 27M Maintain HOLD and raise TP to THB3.0 (from THB2.8), pegged to 1.8x 2015 P/BV and 14x PER; we factored in M&A premium of THB0.50 (derived from 2.0x 2015 P/BV). 3Q14 earnings grew 28% YoY but fell 7% QoQ to THB2.4b, beating our and consensus� estimates by 26% and 14% on healthy NIM and lower-than-expected provisions. Raise FY14/15F earnings by 8%/7% on higher NIM and lower provisions. 9M14 earnings accounted for 76% of our revised FY14 full-year forecast. Click here for report » ECONOMICS Singapore GDP Adv. Estimate 3Q 2014 Singapore GDP Adv. Estimate 3Q 2014 Moderate growth Economics Preliminary 3Q 2014 real GDP growth was +2.4% YoY and +1.2% QoQ. Manufacturing and services expanded amid weak construction. Maintain our 2014-2015 growth forecast of +3.3% p.a. (2014 YTD: +3.2%; 2013: +4.1%) pending full 3Q 2014 GDP. Monetary Authority of Singapore (MAS) forecasts real GDP growth of +2.5% to +3.5% for 2014. Click here for report »