Regional Daily, Maybank KE (2014-11-10)

Daily 10 November 2014 TOP VIEWS Biostime (1112 HK) | TP downgrade IN: Tata Communications (TCOM IN) | TP upgrade Thailand Industrial Estate | OVERWEIGHT Innovalues (IP SP) | TP upgrade Biostime (1112 HK) Worst is yet to come Share Price: HKD17.36 | Target Price: HKD13.80 (-21%) | MCap (USD): 1.4B | ADTV (USD): 8M Maintain SELL. Latest channel checks show company�s recent online move has disrupted its channel pricing stability and upset its maternity store customers (70% of its sales). We thus foresee earnings to further decline going forward. We believe souring relationship with baby channel poses significant earnings threat given this jeopardizes Biostime in attracting new-mother customers (as its IMF sales rely on baby stores� push rather than being brand equity driven). We note company�s reducing A&P effort in 2H14 may help its short-term financials, but that may translate into weaker sales growth prospects and market share loss, in our view. Click here for report » IN: Tata Communications (TCOM IN) Data services to lead growth Share Price: INR411 | Target Price: INR500 (+22%) | MCap (USD): 1.9B | ADTV (USD): 4M TCOM is up 37% since we initiated coverage in Apr '14. We remain bullish on sustainable growth and increase our SOTP-based TP to INR500 (from INR429) as we roll over to FY16. 2QFY15 EPS of INR3.2 beat consensus and our estimate due to benefit from one-time interest income. EBITDA margin of 15%, +102bps QoQ, was in line with our estimate whereas flattish revenue growth was a slight miss. We factor in lower revenue growth and fine-tune our FY15/16 EBITDA forecast by -3%/-1%. Our FY15F EBITDA is inline with consensus and FY16F EBITDA is 6% higher. Click here for report » Thailand Industrial Estate Expect 3Q14 to be inline Sector preview Remain OVERWEIGHT on industrial estate/factory operators and expect 3Q14 results to be in-line with expectations. Our Top Sector Pick is WHA. We continue to rate HEMRAJ as HOLD on valuation grounds, and TICON and AMATA as BUYs. TICON is expected to report a 40% decline in 3Q14 net profit on account of slow factory/warehouse rentals and small revenue from property sales. AMATA, HEMRAJ and WHA are expected to report 22-66% net profit growth; HEMRAJ will have the highest growth. The outlook for the IE/FO operators has improved along with the normalization of the function of the Board of Investments, although at a slower pace than we anticipated. However, we are concerned about recent newsflow relating to the possible amendment of the Foreign Business Act as it might impact foreign investments in Thailand. Click here for report » Innovalues (IP SP) Shifting into higher gear Share Price: SGD0.44 | Target Price: SGD0.65 (+48%) | MCap (USD): 110M | ADTV (USD): 0.9M 3Q14 above expectations on stronger margins. Confirms our turnaround thesis. Raise FY14E-15E EPS by 3-4%. Undervalued growth stock with attractive yields. 24% FY15E EPS growth and ~6% yield at only 8x FY15E EPS. BUY with higher TP of SGD0.65 from SGD0.52, now at 12x FY15E EPS instead of 10x. Still below peers� 13x and undemanding against 22% 3-year EPS CAGR. Click here for report » COMPANY NOTES ENN Energy Holdings (2688 HK) | Rating change China Minsheng Bank (1988 HK) | Company update PVR(PVRL IN) | TP Revision Adaro Energy (ADRO IJ) | Company Update KLCC Property (KLCCSS MK) | Results Review Ta Ann (TAH MK) | Company Update ENN Energy Holdings (2688 HK) Halo disappears; D/G to HOLD Share Price: HKD48.25 | Target Price: HKD51.00 (+6%) | MCap (USD): 6.7B | ADTV (USD): 22M D/G to HOLD. We think CNY1.2b to buy North American LNG refuelling station business is not a good strategic move and will deviate from the best interests of minority shareholders. We believe the LNG business it will acquire in the US will not be profitable in the near term. We expect investors will have to bear the risk of profit dilution in the next several years. Cut TP to HKD51 after factoring in the loss-making business and 10% discount to NAV due to concerns about corporate governance. Still, ENN�s assets in China remain attractive. Click here for report » China Minsheng Bank (1988 HK) Capital constraint unresolved Share Price: HKD7.63 | Target Price: HKD6.35 (-17%) | MCap (USD): 5.7B | ADTV (USD): 38M To issue 200m domestic, 100m offshore preference shares. Limited EPS and ROE dilution of 2.9% and 22bps for 2016. Raising Tier-1 CAR to >10% by end-2016. Keep SELL & our TP. Click here for report » PVR(PVRL IN) Screen count to double in five years Share Price: INR694 | Target Price: INR838 (21%) | MCap (USD): 445M | ADTV (USD): 2M Maintain BUY with new TP of INR838 (from INR746) based on EV/EBITDA of 11x FY16F. We remain bullish on PVRL's superior, long-term growth, driven by market leadership and increased penetration of multiplexes in India. We expect PVRL to double its screens count over five years organically and inorganically. 2QFY15 EPS of INR2.2, -70% YoY missed consensus and our estimate due to fewer mid-big movies. (Full report will be out soon) Adaro Energy (ADRO IJ) Cost benefits Share Price: IDR1,100 | Target Price: IDR1,400 (+27%) | MCap (USD): 2.9B | ADTV (USD): 5M Maintain BUY & IDR1,400 TP, at 1.3x FY15E P/BV. Further operational improvements as catalysts. 1.0x 2015 P/BV at 52% discount to 6-year mean. One-off adjustments for 2014 but maintain 2015 earnings on lower costs. Click here for report » KLCC Property (KLCCSS MK) Beat expectations Share Price: MYR6.78 | Target Price: MYR6.49 (-4%) | MCap (USD): 3.7B | ADTV (USD): 0.7M 9M14 net profit above our expectation, within consensus. Raise earnings forecasts by 6%, DCF-based TP to MYR7.17. Unit price should continue to be supported by strong demand from the Shariah/FBMKLCI Index funds. HOLD. Click here for report » Ta Ann (TAH MK) Positives get better Share Price: MYR3.79 | Target Price: MYR4.75 (+25%) | MCap (USD): 420M | ADTV (USD): 0.3M New logging method and maiden harvesting from forest plantation would boost logs production volume. New plywood plant in Tasmania could turnaround the unit. 2015-16 FFB output growth to remain robust. Reiterate BUY. Click here for report »