Regional Daily, Maybank KE (2014-11-05)

Daily 05 November 2014 TOP VIEWS VTECH Holdings (303 HK) | TP Revision Hengan International (1044 HK) | TP Revision Macau Gaming | OVERWEIGHT Security Bank Corp (SECB PM) | Results Review VTECH Holdings (303 HK) Steady is good Share Price: HKD99 | Target Price: HKD112 (+13%) | MCap (USD): 3.2B | ADTV (USD): 3M Lower TP to HKD112 (still Street-high) as we trim FY15/16F EPS by 6% each, factoring in lighter top line and higher opex. Maintain contrarian BUY as VTECH is showing steady improvement on earnings and rich dividend provides downside support. 1H15 results (10th Nov) are expected to be solid on resilient profitability and stable growth. Click here for report » Hengan International (1044 HK) 2H outlook: In the right direction Share Price: HKD80.75 | Target Price: HKD99.80 (+24%) | MCap (USD): 12.8B | ADTV (USD): 18M Maintain BUY. Lower TP to reflect moderating sales growth assumptions. TP multiple remains 27x FY15F PER. Recovering margins as market share war peaks out is key catalyst. Sanitary napkins business should continue to see high-teens sales growth CAGR with steady margin expansion trend given solid market leadership (despite Kimberly Clark said its Kotex relaunch last year to be successful). Improving outlook for tissue paper and diapers units should support our 23% 2-year EPS CAGR over FY15-16F. Click here for report » Macau Gaming Sector Update It can only get better from here Oct 2014 Macau GGR fell 23% YoY, the sharpest contraction since records began in 2005. That said, we expect YoY contractions to narrow thanks to easier comparisons and recovering fundamentals. Expect sector to gradually re-rate. Maintain OVERWEIGHT. BUY Galaxy, MGM China, Sands China and Wynn Macau. Click here for report » Security Bank Corp (SECB PM) 9M14 income exceeds expectations Share Price: PHP148 | Target Price: PHP172 (+16%) | MCap (USD): 2.0B | ADTV (USD): 3M Reiterate BUY on our Top Pick based on TP of PHP172. 9M14 earnings up 54% to PHP6.4b, beating market forecast. Strong performance across the board, with net interest income up 37%, fees 14% and trading gains 77%. Click here for report » COMPANY NOTES Regional Plantation | NEUTRAL Chinese IPPs | NEUTRAL Perusahaan Gas Negara (PGAS IJ) | TP Revision IOI Corporation (IOI MK) | Company Update Petronas Gas (PTG MK) | Results Review RFM Corp (RFM PM) | Results Review Riverstone Holdings (RSTON SP) | Results Review SIA Engineering (SIE SP) | Results Review Central Plaza Hotel (CENTEL TB) | Results Preview Regional Plantation Sector Update Rainfall deficit drives hope Unexpected rainfall deficit has returned; planters in Central Kalimantan and South Sumatra affected this round. Slowdown in Indonesia�s new planting will bode well for CPO price in next 2-3 years as supply growth slows. We see sustained CPO price recovery to above MYR2,400/t in 1Q15. Maintain our 12M NEUTRAL view. Click here for report » Chinese IPPs Sector Update Power reform trial in Shenzhen Shenzhen to become pilot city to test electricity market reform. We think reform will expand to other cities medium term. Grid in Shenzhen will receive regulated return through T&D tariff. IPPs� on-grid tariff will be based on negotiations between end-users and IPPs or will be market-driven. We think on-grid tariffs will become more volatile due to seasonal demand. If pilot scheme is implemented in more cities or provinces, we believe it will be neutral to large IPPs such as HK-listed IPPs, negative to small IPPs but positive to end-users. Click here for report » Perusahaan Gas Negara (PGAS IJ) Raise TP; Stay HOLD limited upside Share Price: IDR5,950 | Target Price: IDR6,000 (+1%) | MCap (USD): 11.9B | ADTV (USD): 8M Raising FY14-15F earnings by 10% each on better-than-expected 9M14 earnings. 9M14 distribution volume growth of 6% YoY remained on track with our forecast. Awaiting official new gas delivery for FSRU Lampung. Raising TP from IDR5,500 to IDR6,000, retaining non-consensus HOLD given limited upside. Click here for report » IOI Corporation (IOI MK) Stay cautious Share Price: MYR4.90 | Target Price: MYR3.97 (-19%) | MCap (USD): 9.5B | ADTV (USD): 9M Potential stock overhang if IOI drops off the Hijrah Shariah and EMAS Shariah indices this end-November. We expect IOI to report an in-line ~MYR186m PATMI for 1QFY6/15, dragged by ~MYR142m in unrealised forex loss. Maintain SELL with an unchanged TP of MYR3.97 on 20x 2015 PER peg; it trades at ~25x 2015 PER with tepid growth. Click here for report » Petronas Gas (PTG MK) Steady earnings, dividend surprise Share Price: MYR21.80 | Target Price: MYR23.50 (+8%) | MCap (USD): 13.0B | ADTV (USD): 8M 9M14 core net profit was within expectations at 76% of ours and 74% of consensus full-year forecasts. An interim 20sen DPS was declared; timing was a surprise as dividends are usually announced in fiscal 2Q and 4Q. Maintain HOLD, TP unchanged at MYR23.50. Click here for report » RFM Corp (RFM PM) Operating results surge in 3Q14 Share Price: PHP5.09 | Target Price: PHP7.00 (+38%) | MCap (USD): 358M | ADTV (USD): 0.2M 3Q14 sales up 21% while EBIT surged 38% YoY. Unexciting net income due to higher effective tax rate. Maintain BUY. 9M14 earnings lagging but could catch up in 4Q14 on strong momentum. (FULL REPORT WILL BE OUT SOON) Riverstone Holdings (RSTON SP) Undervalued; Still a BUY Share Price: SGD0.96 | Target Price: SGD1.20 (+25%) | MCap (USD): 276M | ADTV (USD): 0.2M 9M14 met expectations at 75.6/76.5% of consensus and our FY14E. FY15E set to be record year from Phase 1 of new capacity for 1b gloves. Maintain BUY & SGD1.21 TP, at 15x FY15E EPS. Catalysts from further market penetration. Click here for report » SIA Engineering (SIE SP) Engines stalled Share Price: SGD4.80 | Target Price: SGD3.50 (-27%) | MCap (USD): 4.2B | ADTV (USD): 2M 2QFY3/15 EPS below due to lower revenue & margins. Interim DPS cut to 6 SGD cts from seven. Cut FY3/15E-17E EPS by 22-25% and TP to SGD3.50 from SGD4.20, still at 20x FY3/16E P/E. Reiterate SELL with de-rating catalysts from further earnings contractions. Click here for report » Central Plaza Hotel (CENTEL TB) Expect fifth straight earnings drop Share Price: THB37.25 | Target Price: THB38.00 (+2%) | MCap (USD): 1.5B | ADTV (USD): 2M Occupancy rate in 3Q14 was 73% (vs 80% in 3Q13, 69% in 2Q14) and ARR was up 11% leading RevPAR to grow 1% YoY. Total system sales growth was 13.2% as SSSG increased 4.9%. 3Q is expected to be weak with net profit to decline 18% YoY to THB160m on weak hotel business and margin contraction. Cut FY14F net profit by 17% and 5%-6% for FY15-16F. Trim TP to THB38 from THB40 to reflect weaker-than-expected margin. (FULL REPORT WILL BE OUT SOON)