Regional Daily, Maybank KE (2014-10-16)

Daily 16 October 2014 TOP VIEWS India Strategy Berjaya Auto (BAUTO MK) | Company visit STP& I Plc (STPI TB) | Results preview Vard Holdings (VARD SP) | Rating change India Strategy Rally fizzles but 3 themes to play Strategy After four months of euphoria, the �Modi� rally appears to be losing steam. Ignoring the hype in growth promises of the new government, investors have taken profit suspecting slow revival this year and acceleration in industrial investment not until FY16. Specifically, return of investment in the industrial sector will be delayed in the absence of quick resolution to the coal crisis. Land acquisition and environmental issues continue to block major new investments in power, metal and roads etc. Hence, maintain our 2014 NIFTY target of 8,355 (+6%) based on 15x FY16 PER consensus earnings. We see three compelling themes: domestic consumption (auto, consumer, media, telecom), exporters (auto, software) and beaten-down cyclicals (banks, cement, roads). (Full report well be out soon) Berjaya Auto (BAUTO MK) Pedal to the metal Share Price: MYR3.13 | Target Price: MYR3.50 (+12%) | MCap (USD): 774M | ADTV (USD): 2M A fast-growing new kid on the block with the balance sheet to expand regionally, riding on Mazda�s revitalised brand. Favourable near-term catalysts: new model launches, production capacity expansion and favourable forex. Our forecasts are unchanged. Reiterate BUY with unchanged TP of MYR3.50 (12x CY15 PER), with positive earnings bias. Click here for report » STP& I Plc (STPI TB) 3Q14 preview � expecting recovery Share Price: THB20.90 | Target Price: THB31.30 (+50%) | MCap (USD): 945M | ADTV (USD): 6M While 1H14 was a disappointment due to delay in the implementation of the Ichthys project affecting revenue and margins, we expect better performance starting 3Q14 onwards. We estimate 3Q14 net profit reached THB726m, up 99% YoY. If our forecast is met, 9M14 could reach THB1.9b, 59% of our full-year forecast. We expect momentum increase starting 4Q14. At this point, we believe risk of major slippage to our FY target is low. Maintain BUY, 12M DCF-based TP of THB31.3 (Street-high). Click here for report » Vard Holdings (VARD SP) Troubled waters; Cut to Hold Share Price: SGD0.70 | Target Price: SGD0.73 (+5%) | MCap (USD): 643M | ADTV (USD): 3M Downgrade to HOLD from BUY following deteriorating company & industry outlook. Promar�s teething problems could last longer than expected. Cut EPS on lower margins & contract wins. TP cut to SGD0.73 from SGD1.15, now on trough 1.0x FY15E P/BV from 1.4x. Click here for report » COMPANY NOTES COSCO Pacific (1199 HK) | Company update Ramayana Lestari (RALS IJ) | TP revision UEM Sunrise (UEMS MK) | Company update Atlas Mining (AT PM) | TP revision Singapore Press Holdings (SPH SP) | Results review TISCO Financial Group (TISCO TB) | Company update COSCO Pacific (1199 HK) Delivering solid throughput Share Price: HKD10.40 | Target Price: HKD13.30 (+28%) | MCap (USD): 3.9B | ADTV (USD): 6M Reiterate BUY with TP of HKD13.30, based on 12-month forward NAV, as port earnings continue to log solid growth. Positive export figures from China should support 4Q14momentum while we expect earnings from ACT and reduction in Xiamen losses to drive FY15. CP is the best play in the port sector given cheap valuation at11.2x FY15F PER, at the low end of its trading history. Click here for report » Ramayana Lestari (RALS IJ) Sales remain slow; Lowering TP Share Price: IDR780 | Target Price: IDR1,000 (+28%) | MCap (USD): 453M | ADTV (USD): 0.8M Reiterate BUY but cutting TP to IDR1,000 (18x PER FY15F) from IDR1,800 after revising down FY14F earnings by 13%on slowing sales trend. Sales momentum continued to slow;Sep14�sales achieved only 87% of company�s monthly target. 9M14 SSSG1.3% (vs 1.9% 8M14 SSSG). Outer islands remained weakest performer with -0.7% 9M14 SSSG vs Greater Jakarta�s 3.2% and Java ex-Jakarta�s 2.6%. Click here for report » UEM Sunrise (UEMS MK) Reducing exposure in Nusajaya Share Price: MYR1.71 | Target Price: MYR1.87 (+9%) | MCap (USD): 2.4B | ADTV (USD): 1M Management is turning cautious on the short-term outlook of the Iskandar Malaysia (IM) property market. Focus will shift to landed properties (namely affordable landed) and overseas projects over the short term. Lower our RNAV estimates by 7%; consequently, we lower our RNAV-based TP by 11% to MYR1.87. HOLD. Click here for report » Atlas Mining (AT PM) Cut forecasts; Keep BUY Share Price: PHP12.62 | Target Price: PHP19.32 (+53%) | MCap (USD): 585M | ADTV (USD): 0.3M Maintain BUY on under-researched stock but lower TP to PHP19.32, still offering 53% upside. Cut 2014F profit by 29% and raise 2015F by 2%. AT needs to carry out delayed preventive maintenance on old mill and new mine, with production close to rated capacity. Expect lower grade and harder ore in 4Q14 to affect costs negatively but partly offset by affiliate Berong Nickel. (Full report will be out soon) Singapore Press Holdings (SPH SP) Unattractive yield, maintain HOLD Share Price: SGD4.17 | Target Price: SGD4.10 (-2%) | MCap (USD): 5.2B | ADTV (USD): 6M 4QFY8/14 results were in line. Revenue was down by 3.9% YoY and core operating income was up marginally by 1.8%. The core media business may continue to languish given the modest economic outlook and a weak property market. There is risk of further dividend cut in FY8/15. Maintain HOLD with an unchanged SOTP TP of SGD4.10. Click here for report » TISCO Financial Group (TISCO TB) On the recovery path Share Price: THB43.75 | Target Price: THB50.00 (+14%) | MCap (USD): 1.1B | ADTV (USD): 1M Maintain BUY and THB50 TP, implying 8x 2015F PER, 1.4x P/BV and 18% ROE. Auto loan demand remained weak; expect loans to drop 6% in 2014 and grow 8% in 2015. Key earnings driver should come from lower provisions; assume lower credit cost of 1.3% next year vs the bank�s guidance of 1.3-1.5% from the improving asset quality. Click here for report »