20180525-兴业金融证券-Regional_Morning_Cuppa_7页_289kb

Summary of Regional Morning Cuppa Document

Core Content

The document is a Regional Morning Cuppa report from RHB, providing investment insights and stock analysis for various markets, primarily Thailand, Malaysia, Indonesia, Singapore, Hong Kong, and the United States. It includes buy, neutral, and sell ratings for different stocks, along with target prices (TP), catalysts, and key risks. Additionally, it outlines investment research disclaimers, distribution restrictions, and conflict of interest disclosures.

Main Views and Key Information

Thailand

• Central Pattana (CPN TB): Maintained BUY rating with a THB95 TP (23% upside), based on a 5-year plan and new mall openings expected to drive stronger YoY growth in 2Q-3Q results. Its residential business is a key growth driver.

• Top BUYs:

  • Longfor (960 HK): BUY rating with HKD26.00 TP. Positive outlook due to solid contracted sales growth, resilient margins, maturing investment property business, and defensive balance sheet.
  • China Construction Bank (939 HK): BUY rating with HKD10.30 TP. Anticipated sustained earnings recovery from accelerating NIM expansion and benign asset quality.
  • Indofood Sukses Maksur (INDF IJ): BUY rating with IDR10,300 TP. Expected higher domestic consumer spending due to government stimulus, benefiting F&B sector. Also, higher flour prices may boost Bogasari Flour Mills earnings.
  • Astra International (ASII IJ): BUY rating with IDR9,500 TP. Raised sales targets due to strong sales orders for Toyota Rush and Daihatsu Terios. Strategy to reposition Terios at a lower price and Toyota Rush at a higher class. Coal price increases may also benefit the company.
  • BSD City (BSDE IJ): BUY rating with IDR2,210 TP. Expectations of higher marketing sales due to lower interest rates, which encourage mortgage users. BSD City has the largest proportion of mortgage users.
  • Malayan Banking (MAY MK): BUY rating with MYR11.80 TP. Asset quality risk is reducing, with early signs of corporate credit demand recovery. Core earnings forecast to grow by 14% in FY18, improving ROE to 10.4%.
  • Genting Malaysia (GENM MK): BUY rating with MYR5.94 TP. Anticipates strong performance in 2018 due to theme park openings, which are expected to re-rate earnings in the long term.
  • Dairy Farm (DFI SP): BUY rating with USD9.53 TP. Positive outlook for health & beauty and convenience stores due to store expansion in China and increased Chinese visitor arrivals. Home and furnishing revenue expected to improve from online presence and new store openings.
  • Sino-Thai (STEC TB): BUY rating with THB25.50 TP. Likely to maintain top position in upcoming MRT projects. Core earnings growth is stronger than other large peers.

Malaysia

• Ta Ann Holdings (TAH MK): BUY rating. Storms have led to increased demand for infrastructure, which has strengthened the company’s position.
• YTL Power (YTLP MK): BUY rating. Attractive valuation despite sell-down.
• Sime Darby Property (SDPR MK): BUY rating. Potential downside risk to sales target, but still positive outlook.
• Kossan Rubber Industries (KRI MK): NEUTRAL rating. Capacity additions are expected to drive stronger 2H18 performance.
• UOA Development (UOAD MK): NEUTRAL rating. Earnings expected to improve in 2H.
• Hock Seng Lee (HSL MK): NEUTRAL rating. Business as usual for Sarawak projects.
• Nova MSC (NOVM MK): NEUTRAL rating. Watch for new contracts.
• Malakoff Corp (MLK MK): BUY rating. Closer to recovery.

Other Markets

• Auto & Autoparts: NEUTRAL rating. Tax-free window ahead.
• Genting Plantations (GENP MK): NEUTRAL rating. Not a great start to the year.
• Padini (PAD MK): NEUTRAL rating. Dressing up for FY19.
• MSM Malaysia (MSM MK): NEUTRAL rating. Another disappointing quarter.
• WCT (WCTHG MK): NEUTRAL rating. Regaining lost ground difficult.
• Jaya Tiasa (JT MK): NEUTRAL rating. Double whammy from plantation and timber sectors.
• Fiamma (FHB MK): NEUTRAL rating. Property segment still soft.
• TSH Resources (TSH MK): SELL rating. Young trees hinder profit contributions.

Investment Research Disclaimers

• The report is for information purposes only and not an investment offer.
• RHB does not guarantee the accuracy or completeness of the information.
• Forward-looking statements are subject to risks and uncertainties.
• Past performance is not a guide to future performance.
• Currency risk is a factor, especially for depository receipts.
• Investors should make their own decisions and consider regulatory, legal, and financial implications.

Distribution Restrictions

• Malaysia: Issued by RHB Research Institute Sdn Bhd. No obligation to update opinions.
• Thailand: Issued by RHB Securities (Thailand) PCL, a licensed securities company.
• Indonesia: Issued by PT RHB Sekuritas Indonesia, not affiliated with the companies.
• Singapore: Only for accredited, expert, and institutional investors.
• Hong Kong: Issued by RHBHK, a full-service investment bank. May have conflicts of interest.
• United States: Only for major institutional investors, not for U.S. persons.

Conflicts of Interest

• Malaysia: RHB has no qualified shareholding or syndicate participation in the subject companies.
• Thailand: RHB may have business relationships or interests in the subject companies.
• Indonesia: No affiliation with the subject companies.
• Singapore: No market making, board positions, or conflict of interest relationships.
• Hong Kong: RHBHK has investment banking relationships with some companies, and analysts are prohibited from holding securities of the companies they cover.

Analyst Ratings and Target Prices

Additional Notes

• The report includes links to previous reports for further reference.
• Investors are advised to consider regulatory, legal, and financial implications before making investment decisions.
• Confidentiality is emphasized, and distribution without consent is prohibited.