Regional Daily, Maybank KE (2014-11-04)

Daily 04 November 2014 TOP VIEWS MediaTek (2454 TT) | Results Preview HSBC (5 HK) | Results Review Thailand Construction | OVERWEIGHT Berjaya Auto (BAUTO MK) | Company Update MediaTek (2454 TT) Look beyond 4Q14 Share Price: TWD437.50 | Target Price: TWD600 (+37%) | MCap (USD): 22.6B | ADTV (USD): 97M 3Q results and 4Q guidance to be released on 6th Nov after market. Expect record 3Q results but a muted 4Q outlook. MTK is undergoing some transitions as it improves its 4G/LTE offering. We look for profitability to resume growth in 2Q15. 4G upgrade in China and 3G smartphone migration in global EM offer growth opportunities while expectations are well-managed after share price correction. Maintain BUY. Click here for report » HSBC (5 HK) Raise CIR & cut ROE target Share Price: HKD78.65 | Target Price: HKD69.85 (-11%) | MCap (USD): 191.0B | ADTV (USD): 157M Maintain contrarian SELL. Keep 2015-16 EPS forecasts, TP. Raise CIR target to ~60%, cut ROE target to More regulatory costs ahead (expecting ~USD0.8b in 2015). Click here for report » Thailand Construction Sector update Expect a strong 3Q; Keep O/W Maintain OVERWEIGHT to capture positive news flow on busy construction activities in FY15 � expect c.THB560b of infrastructure projects to open for bidding; CK is our Top Pick. BUYs on STEC and ITD. Expect solid 3Q14F earnings at THB1.7b, up 122% QoQ and 24% YoY driven by gain from sale of BMCL by CK. STEC is likely to see e post results announcement due to soft GPM in 2H14. ST catalyst from the announcement of winning bidder for Green line extension (Mochit-Saphanmai-Khukhot) worth THB29b. This should be in Dec 2014. (FULL REPORT WILL BE OUT SOON) Berjaya Auto (BAUTO MK) A play on weaker yen Share Price: MYR3.69 | Target Price: MYR3.50 (-5%) | MCap (USD): 899M| ADTV (USD): 2M BAuto is a direct beneficiary of a weaker JPY with 60-65% of COGS denoted in that currency. Having imputed a weaker JPY/MYR, our FY15/16/17 forecast is lifted by 11%/16%/17%. Reiterate BUY with higher TP of MYR4.35 (+24%), pegged to higher CY15 PER target of 13x (from 12x) given its superior growth (37% 3-year earnings CAGR) and low PEG of 0.4x. Click here for report » COMPANY NOTES Vanguard Int�l Semiconductor (5347 TT) | Results Review Guangzhou R&F Properties (2777 HK) | Company Visit Great Wall Motor (2333 HK) | Company Update Sino-Ocean Land (3377 HK) | Rating Change Uni-President China (220 HK) | TP Revision Bank of the Philippine Islands (BPI PM) | Results Review Holcim Philippines Inc (HLCM PM) | TP Revision Cosco Corp (COS SP) | Results Review Bumrungrad Hospital (BH TB) | Results Preview Vietnam Monthly View Vanguard Int�l Semiconductor (5347 TT) Fully loaded again Share Price: TWD47.70 | Target Price: TWD68.00 (+43%) | MCap (USD): 2.6B | ADTV (USD): 11M 3Q results and 4Q guidance reinforce our thesis demand-and-supply dynamics for 200mm foundry market remains structurally favourable for the supply-side. VIS� momentum is likely to turn positive from 2Q15 following the conversion of its new fab. Stable industry dynamics and new capacity to deliver a stable 20% growth in FY15-16F. Strong cash generation and balance sheet are likely to trigger more shareholder returns � another positive. Click here for report » Guangzhou R&F Properties (2777 HK) Some project delays; MTN rollout likely in 1H Share Price: HKD8.45 | Target Price: HKD11.00 (+30%) | MCap (USD): 3.5B | ADTV (USD): 13M Maintain BUY for attractive valuations (61% discount to NAV, 4x PER and 0.5x P/BV 2015) and as we expect gearing to slowly improve and fall from Jun levels. Management guidance 2H gearing will be lower HoH supports our view. We expect refinancing concerns to ease. R&F said its proposed issuance of medium-term notes (MTNs) (3-10 years of up to CNY7b) could occur in 1Q15, as it will take a while after the shareholders� approval last month. Prelim plans for around 5 new launches in Nov and Dec, with potential slippage of Tianjin Guangdong Plaza, GZ Chebeibei and Chongqing Yubei to 2015. Likely delays are reasonable as R&F needs to ensure its gearing and cash flow health. Click here for report » Great Wall Motor (2333 HK) Sales rebound on strong SUV Share Price: HKD33.65 | Target Price: HKD33.90 (+1%) | MCap (USD): 4.5B | ADTV (USD): 36M Great Wall Oct sales growth turned positive after seven months of decline. Acceleration of new model launches should continue to support sales in coming months. LONG domestic brands and SHORT GAC. Click here for report » Sino-Ocean Land (3377 HK) Good landbanking + city exposure to brighten prospects Share Price: HKD4.55 | Target Price: HKD5.40 (+19%) | MCap (USD): 4.4B | ADTV (USD): 2M Countercyclical expansion story for 2015. In our view, Sino-Ocean�s landbanking track record has improved, with our estimate of this year�s landbanking fetching over 30% GPM (except for Wuqing), far exceeds its 1H14 GPM of 20% and last year�s 24%. Upgrade to BUY with TP of HKD5.40/sh, +19% potential. YTD landbanking includes various Beijing parcels and Shanghai, cities where we saw 27% and 39% MoM rise in GFA transacted in Oct per CREIS data. Further loosening could benefit Sino-Ocean as upgrader demand is warming up. We view stock valuation as attractive, at 58% dis. to NAV, 6x PER and 0.6x P/BV for 2015 (latter two at around -0.6 SD below 6-yr his. avg). Our TP is pegged to 50% disc. To NAV. (FULL REPORT WILL BE OUT SOON) Uni-President China (220 HK) Winning in a smart way Share Price: HKD7.35 | Target Price: HKD8.20 (+12%) | MCap (USD): 4.1B | ADTV (USD): 3M Maintain BUY on strong pipeline and easing competition. Full-year contribution of new products and end of free-sausages offer bode well for FY15F. New TP pegged at 29x FY15F PER. New flavour of sea-salt based juice drinks and several new flavours of high-end bowl noodles to be launched in 4Q14 and massive production achievable as bottlenecks resolved. Disciplined A&P and capex budget guidance intact. Reduced negative FCF and noodles unit turnaround to be key catalyst. Click here for report » Bank of the Philippine Islands (BPI PM) Exceptional loan growth but weak trading Share Price: PHP95.00 | Target Price: PHP93.50 (-2%) | MCap (USD): 8.3B | ADTV (USD): 3M Maintain HOLD as stock trades at a premium to our TP of PHP93.50, equivalent to 2.3x 2015F P/BV. 9M14 earnings of PHP12.8b still below expectations. Strong loan growth of 28% slightly tempered margin compression and easing treasury gains. Click here for report » Holcim Philippines Inc (HLCM PM) Higher costs soften 3Q14 earnings Share Price: PHP14.10 | Target Price: PHP18.00 (+28%) | MCap (USD): 2.0B | ADTV (USD): 0.1M 3Q14 sales surged 18% YoY but net profit up only 4% mainly due to importation of higher costing clinker. Margins could improve starting 4Q with less clinker imports, lower fuel prices. Maintain BUY and trim TP to PHP18. Strong profits expected even after revisions. (FULL REPORT WILL BE OUT SOON) Cosco Corp (COS SP) Going to get tougher Share Price: SGD0.60 | Target Price: SGD0.54 (-9%) | MCap (USD): 1.0B | ADTV (USD): 0.7M 3Q14 PATMI of SGD7.1m (+69.2% YoY, -50.0% QoQ) missed expectations due to margin shortfall. Gross margins of 4.9% the lowest in history. Cut FY14E-16E EPS by 23-77%. Reiterate SELL. TP cut to SGD0.54 from SGD0.67, now at 0.9x FY15E P/BV, -1SD of 10-year mean. Click here for report » Bumrungrad Hospital (BH TB) Expect single-digit growth Share Price: THB133.00 | Target Price: THB130.00 (-2%) | MCap (USD): 3.0B | ADTV (USD): 3M Hospital revenue is expected to jump 6% YoY as IPD and OPD revenue should rise 5% and 11%. Overall patient traffic could expand 8% YoY. EBITDA margin can be maintained at 29.4%. Forecast net profit will increase 5% YoY and 17% QoQ after entering high-season and gradual patient traffic recovery. Maintain HOLD with DCF-based TP of THB130, implying 35x PER, 7x P/BV, and 1.5x PEG for 2015F. We expect higher competition. We prefer BGH (TP THB23). Click here for report » Vietnam Monthly View Strategy Maintain upbeat yr-end view for VN-Index Volatility increased as the VN-Index challenged at around the 600-points level and the market was driven by multiple factors. ADTV on the HSC fell to USD114m in Oct from USD150m in Sep, although the record ADTV in Sep was largely caused by quarterly portfolio rebalancing of 02 active ETFs. Foreign investors sold a net USD56m, which was heavily skewed towards the first half of Oct, caused by both ETFs and the downtrend in global markets in the second half. Click here for report » ECONOMICS Thailand Economics Inflation to remain benign But BoT likely to be slightly hawkish Headline inflation eased further in October, declining for the fifth consecutive month, on lower global fuel prices and falling prices of vegetables and fruits. We expect inflation to remain benign until next year. Expect BoT to keep key rate at 2.00% in last two meetings this year, but it is possible that a slightly hawkish tone could be perceived from the MPC�s statement, maybe starting from this coming Wednesday�s meeting. Click here for report »