REGIONAL DAILY
December 17, 2014
Asia Pacific Daily
ASIA PACIFIC
| 17 December 2014
Equity Research Reports…
Showcasing CIMB Research
Research Ideas
———————————————————————————————————————————————————————————————————————————————————————————————————————
HKG: Property Investment
Manufacturing space >PDF
15/12
———————————————————————————————————————————————————————————————————————————————————————
▌South Korea
—————————————————————————————————————————————————————————————————————————————————
THB: Navigating Thailand | 2015
Tighten your seatbelts >PDF
12/12
—————————————————————————————————————————————————————————————————————————————————
IND: Navigating Indonesia | 2015
Awaiting delivery >PDF
▌Australia/New Zealand
Alumina (AD, TP:A$1.95) - Ready to bear fruit | P5
STW Group (AD, TP:A$1.18) - Not the ideal Christmas gift | P6
Media - Integrated (OW) - Tuning the dial – Radio Survey 8 | P7
11/12
—————————————————————————————————————————————————————————————————————————————————
MAL: Navigating Malaysia | 2015 09/12
Malaysia's demographic dividend >PDF
—————————————————————————————————————————————————————————————————————————————————
AU: Qantas Airways 08/12
Plenty of upside still to come >PDF
Country Recommendations
SK Hynix (HD, TP:W50,000.00) - Lacking momentum | P8
———————————————————————————————————————————————————————————————————————————————————————
▌Malaysia
GHL Systems Bhd (AD, TP:RM1.00) - Securing Philippines TPA | P9
KLCC Property Holdings (HD, TP:RM6.90) - Touring around Menara ExxonMobil and Menara 3 |
P10
SP Setia (HD, TP:RM3.34) - Still top dog in property sector | P11
Top Glove Corporation (HD, TP:RM4.31) - Better showing | P12
———————————————————————————————————————————————————————————————————————————————————————
▌Taiwan
Cathay Financial (HD, TP:NT$53.00) - Another southbound move | P13
———————————————————————————————————————————————————————————————————————————————————————
▌Thailand
Thaicom (AD, TP:THB52.00) - Solid fundamentals | P14
———————————————————————————————————————————————————————————————————————————————————————————————————————
Australia
China / HK
India
Indonesia
South Korea
Malaysia
Philippines
Singapore
Taiwan
Thailand
Vietnam
Underweight
Overweight
Neutral
Overweight
Overweight
Neutral
Underweight
Neutral
Neutral
Underweight
Overweight
Reg. Equity Research Contacts
———————————————————————————————————————————————————————————————————————————————————————————————————————
Chris HUNT
Regional Head of Research
T: (852) 2539 1315
E: [email protected]
Show Style "View Doc Map"
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Page 1
Compiled as @: 12/17/2014 2:14:27 AM
Asia Pacific Daily│Equity Research Reports…
December 17, 2014
Key Metrics
Market Indices
Australia
China 'A'
China 'H'
Hong Kong
India
Indonesia
Japan
Korea
Malaysia
Philippines
Singapore
Taiwan
Thailand
AsiaPac ex Japan
MSCI Asia Pacific XJ
ASX 200
Shanghai A
HSCEI
HSI
Sensex
JCI
Nikkei
Korea Comp
FBMKLCI
PSEi
STI
Taiwan Wgtd
SET
MSCI
LastClose
5,152
3,165
11,137
22,671
26,781
5,026
16,755
1,904
1,674
7,160
3,215
8,951
1,462
452
1D
-0.7%
2.3%
-0.7%
-1.6%
-2.0%
-1.6%
-2.0%
-0.8%
-1.4%
-1.6%
-2.4%
-0.4%
-1.1%
-1.0%
1M
-5.5%
21.9%
3.5%
-5.9%
-4.5%
-0.5%
-4.2%
-2.1%
-7.7%
-0.8%
-3.0%
-0.4%
-7.2%
-5.9%
YTD
-3.7%
42.9%
3.0%
-2.7%
26.5%
17.6%
2.8%
-5.3%
-10.3%
21.6%
1.5%
3.9%
12.6%
-3.4%
530
510
490
470
450
430
410
Dec-13
Mar-14
SOURCE: CIMB, BLOOMBERG, DATASTREAM, MSCI
IBES/MSCI Market Valuations
Australia
China
Hong Kong
India
Indonesia
Korea
Malaysia
New Zealand
Philippines
Singapore
Taiwan
Thailand
Asia ex-Japan
Asia Pac ex-Japan
12m Forward
P/E (x)
13.87
9.00
14.67
16.91
14.77
9.83
15.10
18.37
19.12
13.35
12.92
13.99
11.59
12.07
Jun-14
Sep-14
Dec-14
SOURCE: CIMB, BLOOMBERG, DATASTREAM, MSCI
Regional Currencies
12m Forward
EPS
6.82
8.49
7.49
16.72
10.90
19.36
8.51
9.21
12.89
6.98
7.65
13.19
11.14
9.32
12m Forward
DY (%)
5.10
3.55
3.13
1.55
2.67
1.45
3.33
4.97
2.26
3.80
3.58
3.14
2.88
3.40
(to US$1)
Australian Dollar
China Renminbi
Hong Kong Dollar
Indian Rupee
Indonesian Rupiah
Japanese Yen
Korean Won
Malaysian Ringgit
New Zealand Dollar
Philippine Peso
Singapore Dollar
Taiwan Dollar
Thai Baht
12m Forward
ROE
13.00
13.80
8.40
15.80
19.70
9.93
12.10
9.93
15.00
9.64
13.20
14.80
11.90
12.10
SOURCE: CIMB, BLOOMBERG, DATASTREAM, MSCI
Upcoming Major Data Releases
Event/data
Nov industrial production
Nov WPI
Nov external trade
Nov external trade
Nov CPI
Nov CPI & 3Q14 current account balance
Nov external trade
Central bank monetary policy decision
Nov CPI
Central bank monetary policy decision
Central bank monetary policy decision
Central bank monetary policy decision
CY14 forecast LastClose
1.12
0.83
6.20
6.19
7.85
7.75
64.0
63.54
12,000
12,725
105.0
115.93
1,090
1,086.44
3.28
3.49
1.25
0.78
45.0
44.71
1.27
1.30
30.0
31.29
32.5
32.95
1D
0.5%
0.0%
0.0%
-0.9%
-0.1%
2.6%
1.2%
0.2%
1.2%
-0.1%
1.0%
0.1%
0.1%
YTD
-7.6%
-2.2%
0.0%
-2.7%
-4.4%
-9.5%
-3.4%
-6.1%
-4.7%
-0.7%
-2.9%
-4.8%
-0.6%
SOURCE: CIMB, BLOOMBERG, DATASTREAM, MSCI
Commodities
Country
United States
India
India
Japan
Eurozone
United States
Singapore
Thaialnd
Malaysia
United States
Taiwan
Japan
Date
15-Dec
15-Dec
15 to 17-Dec
17-Dec
17-Dec
17-Dec
17-Dec
17-Dec
17-Dec
18-Dec
18-Dec
19-Dec
SOURCE: CIMB, BLOOMBERG, DATASTREAM, MSCI
Page 2
WTI spot (US$/bbl)
Gold (US$/oz)
Baltic Dry Index
LastClose
56
1,215
838
% chg
0.0%
0.0%
-0.8%
YTD
-43.2%
0.6%
-63.2%
SOURCE: CIMB, BLOOMBERG, DATASTREAM, MSCI
Asia Pacific Daily│Equity Research Reports…
December 17, 2014
ADR Results
|
as at 17 December 2014
ADR Results
ADR Price
Name
Currency
Currency
Last Px
Conversion
Ratio
-0.76%
0.74%
-0.92%
-1.70%
-0.33%
4.00%
TWD
TWD
TWD
TWD
TWD
TWD
31.33
31.33
31.33
31.33
31.33
31.33
5
5
5
10
10
5
0.05
0.05
0.05
0.05
1.05
0.05
7.36
21.76
6.06
4.58
30.29
2.34
37600
44500
31450
34800
285500
47700
276000
-2.20%
-5.00%
-0.47%
-2.90%
0.00%
-0.93%
0.91%
KRW
KRW
KRW
KRW
KRW
KRW
KRW
1099.35
1099.35
1099.35
1099.35
1099.35
1099.35
1099.35
1
0.5
0.5
0.5
0.25
1
0.11111
0.05
0.05
0.05
0.05
0.05
0.05
0.05
34.25
20.29
14.35
15.88
64.97
43.44
27.94
BHP AU
RIO LN
TLS AU
WBC AU
ANZ AU
NAB AU
CBA AU
28.33
2616.5
5.74
31.82
30.76
31.48
81.27
-0.46%
-2.50%
0.70%
-0.72%
-0.77%
-1.47%
-0.58%
AUD
GBp
AUD
AUD
AUD
AUD
AUD
0.82
1.56
0.82
0.82
0.82
0.82
0.82
2
1
5
1
1
0.5
1
0.05
0.05
0.05
0.05
0.05
0.05
0.05
46.56
40.86
23.61
26.17
25.30
12.97
66.76
-2.73%
0.31%
NWS AU
RMD US
17.66
53.35
-0.84%
-0.21%
AUD
AUD
0.82
0.82
1
0.1
0.05
0.05
14.55
6.55
57.05
55.69
13.12
23.15
46.46
10.55
51.03
103.49
14.13
76.32
126.70
7.99
-1.21%
-0.20%
-3.17%
-1.03%
-1.94%
-1.13%
0.57%
1.45%
-2.18%
0.26%
-0.20%
-1.24%
941 HK
728 HK
762 HK
6883 HK
HSBA LN
2600 HK
2628 HK
857 HK
700 HK
386 HK
883 HK
1171 HK
88.95
4.39
10.20
60.00
592.20
3.36
26.65
8.25
111.90
6.03
10.14
6.36
-1.88%
-0.23%
-3.95%
-1.64%
-1.90%
-0.89%
-0.37%
1.98%
-1.58%
0.00%
0.80%
-1.40%
HKD
HKD
HKD
HKD
GBp
HKD
HKD
HKD
HKD
HKD
HKD
HKD
7.75
7.75
7.75
7.75
1.56
7.75
7.75
7.75
7.75
7.75
7.75
7.75
5
100
10
3
5
25
15
100
1
100
100
10
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
1.05
0.05
0.05
57.42
56.67
13.21
23.27
46.24
10.88
51.61
106.46
14.48
78.83
130.84
8.25
2.68%
8.44%
0.76%
23.24%
4.87%
11.33
49.09
30.88
11.28
41.32
-2.16%
-1.33%
-1.25%
0.89%
-3.01%
ICICIBC IN
HDFCB IN
INFO IN
WPRO IN
TTMT IN
345.25
941.50
1924.80
541.55
493.95
-0.30%
1.10%
-0.71%
-0.29%
-1.20%
INR
INR
INR
INR
INR
62.91
62.91
62.91
62.91
62.91
2
3
1
1
5
0.05
0.05
0.05
0.05
0.05
11.03
44.95
30.65
8.66
39.31
-0.38%
-47.76%
-2.04%
63.37
11.20
43.04
0.76%
-29.74%
-2.84%
TEL PM
ISAT IJ
TLKM IJ
2840
4190
2785
-0.14%
0.12%
-1.40%
PHP
IDR
IDR
44.68
12697.5
12697.5
1
50
200
0.05
0.05
0.05
63.61
16.55
43.92
US Ticker
SPIL UQ
TSM UN
ASX UN
AUO UN
CHT UN
UMC UN
Prem/Disc
ADR Last Px ADR Px Chg
Local Ticker Local Last Px Local Px Chg
SILICONWARE PRECN.INDS. SPN.ADR 1:5
TAIWAN SEMICON.SPN.ADR 1:5
ADVANCED SEMICON.ENGR. SPN.ADR 1:5
AU OPTRONICS ADR 1:10
CHUNGHWA TELC.CO.SPN.ADR 1:10
UTD.MICRO ELTN.CO.ADR 1:5
-1.94%
0.83%
1.79%
-0.29%
-4.24%
-5.90%
7.22
21.94
6.17
4.57
29.06
2.21
-0.96%
-0.14%
-0.32%
-0.65%
-0.41%
2.32%
2325 TT
2330 TT
2311 TT
2409 TT
2412 TT
2303 TT
45.80
136.00
37.65
14.20
91.60
14.35
KB UN
KEP UN
KT UN
LPL UN
PKX UN
SHG UN
SKM UN
KB FINANCIAL GP.ADR 1:1
KOREA ELEC.PWR.SPN.ADR 2:1
KT ADR 2:1
LG DISPLAY ADR 2:1
POSCO ADR 4:1
SHINHAN FINL.GP.ADR 1:1
SK TELECOM SPN.ADR 9:1
-2.06%
-3.89%
-2.16%
-1.78%
-1.83%
-2.19%
-0.92%
33.56
19.53
14.05
15.60
63.81
42.51
27.69
-1.58%
-6.78%
-0.85%
-1.64%
0.47%
-0.72%
2.03%
105560 KS
015760 KS
030200 KS
034220 KS
005490 KS
055550 KS
017670 KS
BHP UN
RIO UN
TLSYY US
WBK UN
ANZBY UV
NABZY UV
CMWAY UV
BHP BILLITON ADR 1:2
RIO TINTO SPN.ADR 1:1
TELSTRA SPN.ADR 1:5
WESTPAC BKG.SPN.ADR 1:1
AUS.& NZ.BK.GP.SPN.ADR 1:1
NAT.AUS.BANK SPN.ADR 1:1
COMMONWEALTH BK.OF AUS. SPN.ADR 1:1
-3.12%
-0.39%
-0.72%
-1.20%
-0.79%
-0.82%
-0.06%
45.15
40.70
23.44
25.86
25.10
12.87
66.72
-2.23%
-2.59%
0.26%
-0.92%
-0.99%
-1.64%
-0.07%
NWS UQ
RMD AU
NEWS 'B'
RESMED CDI.
-2.08%
-1.23%
14.25
6.47
CHL UN
CHA UN
CHU UN
MPEL UQ
HSBC UN
ACH UN
LFC UN
PTR UN
TCEHY US
SNP UN
CEO UN
YZC UN
CHINA MOBILE SPN.ADR 1:5
CHINA TELECOM SR.H ADR 1:100
CHINA UNIC.ADR 1:10
MELCO CWN.ENTM.ADR 1:3
HSBC HDG.ADR 1:5
ALUM.CHIN.ADR 1:25
CHINA LF.IN.SPN.ADR 'H' 1:15
PETROCHINA SPN.ADR 1:100
TENCENT HDG.UNSP.ADR 1:1
CHINA PTL.& CHM.'H' ADR 1:100
CNOOC SPN.ADR 1:100
YANZHOU COAL MNG. 'H' SPN.ADR 1:10
-0.64%
-1.77%
-0.66%
-0.51%
0.48%
-3.17%
-1.14%
-2.87%
-2.54%
-3.29%
-3.27%
-3.30%
IBN UN
HDB UN
INFY UN
WIT UN
TTM UN
ICICI BK.ADR 1:2
HDFC BANK ADR 1:3
INFOSYS ADR 1:1
WIPRO ADR 1:1
TATA MOTORS SPN.ADR 1:5
PHI UN
PTINY US
TLK UN
PLDT.TEL.SPN.ADR 1:1
PT INDOSAT SPN.ADR 1:50
TELEKOMUNIKASI INDO.SPN. ADR 1:200
Fee/Rebate Theo ADR Px
China ADR
Ticker
BIDU UQ
GAME UQ
GURE UQ
NTES UQ
QIHU UN
SFUN UN
SINA UQ
SOHU UQ
TCEHY US
FXI US
Name
BAIDU 'A' ADR 10:1
SHANDA GAMES ADR 1:2 'A'
GULF RESOURCES
NETEASE ADR 1:25
QIHOO 360 TECH.CL.A ADR 2:3
SOUFUN HDG.CL.A ADR 1: 0.20
SINA
SOHU.COM
TENCENT HDG.UNSP.ADR 1:1
ISHARES CHINA LARGE-CAP
ADR Last ADR Px
Px
Chg
225.8
6.25
1.08
99.75
59.65
7.50
37.22
48.76
14.13
39.45
-1.53%
-0.95%
1.89%
0.30%
-0.95%
-2.98%
-0.25%
1.97%
-2.18%
-0.28%
SOURCES: CIMB, COMPANY REPORTS
Page 3
Asia Pacific Daily│Equity Research Reports…
December 17, 2014
CIMB Daily Revisions
|
Mkt Cap
Recommendation
as at 17 December 2014
CIMB Daily Revisions
Reuters/
Market
BBG
Date
Company
(USD M)
Lead Analyst
Australia
AWC AU
16-Dec-14
Alumina
$3,788.92
Michael EVANS
↔
Curr
Prev
Add
Add
Price Target
A$
AWC.AX
Australia
SGN AU
VTG AU
Prev
End
Chg%
1.95
2.00
2014
-16.3
2015
-6.1
-2.5%
16-Dec-14
STW Group
$314.65
Matthew NICHOLAS
↔
Add
Add
A$
SGN.AX
Australia
Year EPS Forecasts
Curr
1.18
1.50
-21.3%
16-Dec-14
Vita Group
$150.00
Scott MURDOCH
VTG.AX
↔
Add
Add
A$
1.35
+8.0%
1.25
2016
n.c.
2014
-7.8
2015
-11.2
2016
-10.5
2015
11.7
2016
1.8
2017
2.4
SOURCES: CIMB, COMPANY REPORTS
Page 4
Mining│Australia
December 16, 2014
Alumina
COMPANY NOTE
AWC AU / AWC.AX
Market Cap
Avg Daily Turnover
US$3,745m
US$26.39m
A$4,560m
A$30.34m
Free Float
87.0%
2,806 m shares
Current
A$1.63
Target
A$1.95
Prev. Target
A$2.00
Up/Downside
Conviction|
————————————————————————————————————————
Michael EVANS
T (61) 2 9694 6090
E [email protected]
Amber MacKINNON
T (61) 2 9694 6091
E [email protected]
Expert Opinion
Customer Views
————————————————————————————————————————
Show Style "View Doc Map"
Reviewing our margin analysis in advance of Alcoa’s quarterly update,
due on 12 January, we highlight that the margin outlook looks
promising to us. Based on our analysis, we forecast an 83% increase in
AWAC’s alumina EBITDA margin to US$84/t in 4Q compared to
US$46/t 3Q, giving a full-year average margin of US$54/t in 2014. We
forecast a US$92/t average margin in 2015 and a A$0.09ps dividend,
yielding 7%. We believe this will offer support for the stock over coming
months and retain our Add recommendation with a slightly revised
target price of A$1.95ps.
While we expect the higher average
alumina price will be the key catalyst
for an 83% increase in the 4Q margin
for Alcoa’s alumina business, a weaker
A$/US$, weaker Brazilian Real and
lower oil prices are all tailwinds for
margin expansion going into 2015.
Our US$92/t forecast average margin
in 2015 assumes an average A$/US$
exchange rate of 0.87, and therefore
looks at risk to the upside. At spot
A$/US$ and BRLUSD exchange rates,
we estimate the 2015 EBITDA margin
to be around US$100/t.
Alumina price the key driver
The increase in average alumina
prices of +10% in 4Q over 3Q has the
largest impact on our margin forecast.
We estimate the aluminium-linked
alumina contracts are currently priced
at US$272/t compared to spot prices
of
US$354/t,
highlighting
the
increasing importance of spot based
sales. Spot based sales in 2015 are
guided by the company to be 75% of
total sales versus 68% in 2014.
Price Close
1.70
162
1.50
144
1.30
126
1.10
108
0.90
80
90
60
Vol m
40
20
Mar-14
Jun-14
Sep-14
Source: Bloomberg
52-week share price range
1.63
1.78
1.01
Current
Target
Weakening regional currency
tailwinds
Using company guidance of a
US$1.40/t EBITDA margin increase
for every 1c weakening of the A$/US$
exchange rate leads to another US$7/t
in AWC’s margin using spot of 0.82
versus our base case of 0.87. An 11%
weakening of the Brazilian Real in the
4Q compared to the 3Q also leads to a
US$0.50/t increase in the margin,
using company guided sensitivities.
Higher yield from CY15
Based on AWAC distributing all
earnings (post overheads, interest and
calls on cash), in line with previous
periods, our US$92/t EBITDA
forecast in 2015 equates to US$260m
underlying earnings for Alumina Ltd,
an EPS and DPS of US$0.09 and a
yield of 7%. In 2011 when it last paid a
dividend, AWC’s EPS and DPS were
US$0.052 and US$0.06 respectively,
illustrating the high pay-out structure
of the company.
Financial Summary
Relative to S&P/ASX 200 (RHS)
1.90
Dec-13
|
Ready to bear fruit
Notes from the Field
Company Visit
Channel Check
20.0%
1.95
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Normalised EPS (US$)
Normalised EPS Growth
FD Normalised P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Normalised EPS Estimates
Normalised EPS/consensus EPS (x)
Dec-12A
Dec-13A
Dec-14F
Dec-15F
Dec-16F
(25.7)
(62.1)
(0.022)
(141%)
NA
0.00%
NA
50.02
25.3%
1.24
(1.92%)
42.3
0.5
0.006
NA
220.3
0.00%
91.73
NA
4.8%
1.34
0.63%
113.0
25.8
0.036
489%
37.4
0.030
2.25%
33.62
64.91
1.8%
1.28
3.49%
(18.0%)
2.23
261.9
256.7
0.092
159%
14.4
0.090
6.74%
14.17
13.70
(1.1%)
1.26
8.78%
(5.5%)
1.13
260.2
261.0
0.093
1%
14.3
0.090
6.74%
14.02
13.41
(3.3%)
1.25
8.75%
(0.0%)
0.97
SOURCE: CIMB, COMPANY REPORTS
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
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Page 5
Media - Integrated│Australia
December 16, 2014
STW Group
COMPANY NOTE
SGN AU / SGN.AX
Market Cap
Avg Daily Turnover
US$312.9m
US$0.96m
A$381.0m
A$1.17m
Free Float
81.0%
404.2 m shares
Current
A$0.93
Target
A$1.18
Prev. Target
A$1.50
Up/Downside
Conviction|
————————————————————————————————————————
Matthew NICHOLAS
Julian GUIDO
T (61) 2 9694 6085
E [email protected]
Tim PLUMBE
T (61) 2 9694 6086
E [email protected]
Shawn LEE
T (61) 2 9694 6088
E [email protected]
Guidance a step too far
Expert Opinion
Customer Views
————————————————————————————————————————
Show Style "View Doc Map"
Vol m
Relative to S&P/ASX 200 (RHS)
1.60
109.0
1.40
96.5
1.20
84.0
1.00
71.5
0.80
10
8
6
4
2
59.0
Dec-13
Mar-14
Jun-14
Sep-14
Source: Bloomberg
52-week share price range
0.93
1.55
0.93
Current
1.18
Target
The absence of the anticipated 4Q ramp-up has seen SGN revise
guidance, with a host of clients deferring ad spend against the
backdrop of a challenged domestic economy. That said, we note a
recent change in contract win/retention momentum (to the positive),
which positions the business well for a reasonable CY15.
Nonetheless, we have cut CY14-15F
EPS by 7-11% to account for a softer
outlook, which sees our yield based
target price fall to A$1.18 (from
A$1.50). We maintain our Add call on
valuation grounds, but acknowledge
that gearing (2.3x EBITDA) remains
elevated for some, and therefore
tangible evidence of delveraging is
required in order to drive a rerating.
T (61) 2 9694 6087
E [email protected]
Price Close
|
Not the ideal Christmas gift
Notes from the Field
Company Visit
Channel Check
26.5%
SGN has downgraded full-year
guidance, and now expects CY14
NPAT of A$47-49m, which represents
a 1-4% decline on the pcp (and
compares to August guidance of
“mid-single digit” NPAT growth).
Whilst the company has cited
lower-than-expected
client
commitments across November and
early December, hindsight would
suggest that a weaker-than-normal 1H
exacerbated by a host of contract
losses across the same timeframe
meant more pressure than normal on
the key 4Q period. Pleasingly, contract
win/retention
momentum
has
significantly improved in the last
three months; however, this is more
supportive for CY15 rather than a
remedy for the current softness.
Gearing needs to step down
Heading into CY15, we forecast a flat
core business outcome, with reported
EBITDA growth (7%) the product of
the full-year contribution of the ADG
acquisition offsetting the impact of
the 1H14 contract losses. Furthermore,
we acknowledge that gearing (2.3x
EBITDA, adjusted for earnouts) will
concern some, but forecast a decline
to 2.0x by end CY15 (noting SGN does
have the flexibility of the DRP). We
also note FY15 EBIT Interest Cover of
6.8x.
Valuation appealing as ever
Post the significant recent share price
decline, the stock is trading at 7.3x
CY15F PE, 6.7x adjusted EBIT and
yielding 8.2% on a fully-franked basis.
Put simply, the stock is being priced
for a capital raise, which we believe
will not transpire. That said, whilst we
have maintained our Add on valuation
grounds, we acknowledge that we
expect the gearing overhang will
remain until initial signs of tangible
delveraging (most likely at the 1H15
result) emerge.
Financial Summary
Revenue (A$m)
Operating EBITDA (A$m)
Net Profit (A$m)
Normalised EPS (A$)
Normalised EPS Growth
FD Normalised P/E (x)
DPS (A$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Normalised EPS Estimates
Normalised EPS/consensus EPS (x)
Dec-12A
357.8
79.2
43.91
0.12
3.83%
7.74
0.083
8.92%
6.16
23.61
20.0%
0.87
11.2%
Dec-13A
402.1
87.6
49.53
0.12
2.84%
7.53
0.086
9.25%
6.35
9.27
26.0%
0.83
11.4%
Dec-14F
449.4
89.1
47.72
0.12
(4.06%)
7.85
0.071
7.65%
6.30
NA
35.5%
0.84
10.6%
(7.8%)
0.94
Dec-15F
507.2
95.9
51.75
0.13
7.54%
7.30
0.076
8.22%
5.90
11.23
35.2%
0.83
11.4%
(10.7%)
0.94
Dec-16F
533.8
101.1
55.86
0.14
7.49%
6.79
0.082
8.84%
5.59
8.22
33.0%
0.79
11.9%
(10.4%)
0.94
SOURCE: CIMB, COMPANY REPORTS
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
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Page 6
Media│Media - Integrated
December 16, 2014
AUSTRALIA
MEDIA - INTEGRATED
SECTOR FLASH NOTE
CIMB Analyst(s)
Tuning the dial – Radio Survey 8
The eighth radio survey of 2014 saw share broadly flat from survey 7. We also
note strong recent metro AdEx growth with FYTD +6% vs. pcp.
Figure 1: SXL metro market-weighted* ratings share
—————————————————————————————————————————
Daniel BLAIR
T (61) 2 9694 6070
E [email protected]
David McFADYEN
T (61) 2 9694 6071
E [email protected]
Show Style "View Doc Map"
All ratings
Today network
Triple M network
SXL metro
S8 2014
7.1%
8.0%
15.1%
S7 2014
7.0%
8.1%
15.1%
Change
(bps)
+3
-9
-5
S8 2013
8.8%
8.0%
16.8%
Change
(bps)
-172
-4
-176
CY2013
9.1%
8.3%
17.4%
Commerical ratings
Today network
Triple M network
SXL metro
S8 2014
11.2%
12.8%
24.0%
S7 2014
11.2%
13.1%
24.3%
Change
(bps)
-4
-23
-27
S8 2013
14.0%
12.9%
26.8%
Change
(bps)
-279
-3
-282
CY2013
14.3%
13.0%
27.3%
* Our ratings figures are weighted by audience reach. The first table reflects ratings share across all radio networks, while the
second table reflects only commercial ratings share
SOURCES: CIMB, GFK, NIELSEN MEDIA RESEARCH
What Happened
Commercial Radio Australia and GfK released the last radio ratings survey for
2014. On an all-radio-network ratings basis, Nova Entertainment was the
winner, increasing overall market-weighted ratings share by 53bp vs. S7 2014.
APN gained 44bp while Fairfax was up 6bp and SXL lost 5bp.
On a commercial ratings basis (excluding non-commercial networks), SXL lost
27bp versus S7 to achieve a 24.0% commercial ratings share.
Within SXL’s results (commercial-ratings basis) – by state, Sydney lost 143bp
of share, with a 14.2% share (S7 15.6%), Melbourne lost 31bp to 23.0% (S7
23.3%), Brisbane gained 117bp to 30.3% (S7 29.1%), Adelaide gained 135bp to
29.0% (S7 27.7%) and Perth lost 43bp to 37.9% (S7 38.3%).
Breakfast – On a commercial-ratings basis, SXL lost 9bp of share across the
breakfast timeslots (versus the 27bp it lost across all programming slots).
Today Sydney gained 15bp, with a 4.7% share, while TripleM Sydney lost 64bp
with a 9.9% share. In Melbourne, Fox (part of the Today network) fell 58bp to a
10.8% share, while TripleM lost 14bp to record an 11.7% share.
What We Think
From SXL’s perspective this survey marks a small decline, following the
positive trend in the previous survey (where survey 7 had reversed most of the
decline in surveys 5 and 6; see Figure 2). A key positive is the stabilisation in
commercial share for Today Breakfast in Sydney (+15bp). We note that
management has recently moved to improve the programming schedule,
replacing the current Today Sydney breakfast team with Dan & Maz from
January 2015 and re-signing Hamish and Andy for the national Today drive
slot from July 2015.
Separately, we note that November metro radio AdEx revenue grew +10.3% vs.
pcp, with FYTD now 5.5% vs. pcp. While we don’t know revenue share, the
strong market growth with stable ratings bodes well for SXL.
What You Should Do
The first survey of 2015 is due to be released on 10 March, and we will be
looking for a positive impact from the recently-announced line-up changes. Our
Add rating on SXL is unchanged (last close A$1.03).
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
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Page 7
Semiconductor│South Korea
December 16, 2014
SK Hynix
FLASH NOTE
000660 KS / 000660.KS
Market Cap
Avg Daily Turnover
US$31,558m
US$99.99m
W34,689,312m
W107,224m
Free Float
70.9%
713.7 m shares
Current
W47,650
Target
W50,000
Prev. Target
Up/Downside
W48,000
4.9%
Conviction|
|
Lacking momentum
CIMB Analyst(s)
————————————————————————————————————————
Dohoon LEE
T (82) 2 6730 6121
E [email protected]
Jaekyung KIM
T (82) 2 6730 6131
E [email protected]
Despite the forex tailwind, we see limited catalysts to reverse what we believe
will be a modest decline in Hynix’s earnings cycle in the next 9-12 months. We
raise our FY14-16 EPS by 3-23%, mainly due to the KRW/USD assumption
changes to reflect the recent won depreciation against the greenback. Our
higher target price is still based on 1.7x FY15 P/BV, a slight premium to the
historical average of 1.6x. However, we keep our Hold rating, as risk-reward
at current valuations is not too favourable considering: 1) the already waning
DRAM pricing momentum; 2) the company-specific challenges in 2015; and 3)
the lack of a meaningful shareholders’ return policy.
What Happened
Share price info
Share price perf. (%)
1M
3M
12M
Relative
-1.9
17.0
32.7
Absolute
-3.2
11.3
Major shareholders
30.5
% held
SKT
21.1
Given that more than 90% of Hynix’s revenue is booked in USD vs. less than
30% of costs denominated in USD, we estimate Hynix’s OP will increase by
c.3% for 1% KRW/USD depreciation. As such, we raise our 4Q14 OP by 10% to
W1.72tr, similar to the latest consensus (W1.68tr). While DRAMeXchange last
night released a modest decline (down ~2% hoh) in 1H Dec DRAM contract
prices, our checks suggest the company’s 4Q14’s operations are on track to
meet earlier management guidance. Our ASP and bit growth estimates for 4Q
remain unchanged.
What We Think
Show Style "View Doc Map"
With only three major DRAM players left in the industry, we do not envision
DRAM pricing ‘collapsing’ in the foreseeable future. Yet, demand seasonality,
coupled with potential competition for the high-end DDR4 market, leads us to
believe that DRAM pricing momentum (Fig 1) should not reverse its unexciting
trend anytime soon. With Hynix lagging behind Samsung Electronics in DDR4
and 3-bit NAND, we are concerned that Hynix’s overall market share (Fig 2)
would not be growing unless it shows material progress in technology
leadership and gears up for speedy capacity expansion in the next six months.
We also think Apple’s potential mobile DRAM density upgrade (from 1GB to
2GB) may not be as big of an event as the market believes (Fig 3). We estimate
Apple’s share of global mobile DRAM demand increasing only marginally next
year even with potential downside risk to our smartphone ASP assumption.
What You Should Do
The CIMB Stock Selection Tools (SST) are designed to
complement and enhance the investment decision making
process. The SST incorporate a range of analytical tools,
providing ready access to key company and market data,
valuation tools and charts. If you are interested in subscribing to
the 'Stock Selection Tools', please contact your CIMB account
manager.
Price Close
Relative to KOSPI (RHS)
53,000
148.0
48,000
133.0
43,000
118.0
38,000
103.0
33,000
15
88.0
Vol m
10
5
Dec-13
Mar-14
Jun-14
Sep-14
Source: Bloomberg
52-week share price range
47,650
51,900
34,900
Current
Target
50,000
We think the only potential bright spot for the stock could be an improvement
in Hynix’s shareholders’ return policy, considering its healthy balance sheet.
However, we believe upside to dividend and/or share buyback could be limited,
given the relatively small ownership of SK Group and increasingly high capex
requirement. Maintain Hold.
Financial Summary
Revenue (Wb)
Net Profit (Wb)
Normalised EPS (W)
Normalised EPS Growth
FD Normalised P/E (x)
Price To Sales (x)
DPS (W)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Normalised EPS Estimates
Normalised EPS/consensus EPS (x)
Dec-12A
10,162
(159)
(250)
160%
NA
2.99
0%
11.51
NA
48.1%
3.34
(1.8%)
Dec-13A
14,165
2,872
4,155
NA
11.47
2.33
0%
5.24
NA
13.7%
2.56
25.2%
Dec-14F
17,015
3,950
5,565
34%
8.56
1.99
0%
3.81
NA
(1.3%)
1.93
25.6%
2.8%
1.05
Dec-15F
18,291
3,337
4,613
(17%)
10.33
1.88
0%
4.08
55.18
(3.9%)
1.64
17.2%
22.5%
0.74
Dec-16F
18,085
2,908
3,982
(14%)
11.97
1.92
0%
3.95
44.87
(6.5%)
1.45
12.9%
19.1%
0.64
SOURCE: CIMB, COMPANY REPORTS
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
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Page 8
IT Services│Malaysia
December 16, 2014
GHL Systems Bhd
FLASH NOTE
GHLS MK / GHLS.KL
Market Cap
Avg Daily Turnover
US$108.8m
US$1.01m
RM380.5m
RM3.32m
Free Float
35.3%
632.9 m shares
Current
RM0.60
Target
RM1.00
Prev. Target
Up/Downside
RM1.00
68.1%
Conviction|
|
Securing Philippines TPA
CIMB Analyst(s)
————————————————————————————————————————
Mohd Shanaz NOOR AZAM
T (60) 3 2261 9078
E [email protected]
GHL announced that it has signed an agreement for a prepaid card TPA
arrangement in the Philippines. Omnipay, Inc. has appointed GHL to acquire
merchants for UnionPay International and JCB International. This marks
GHL’s entry into the direct merchant acquisition space, consolidating its
position as the leading payment services provider in the Philippines. We
maintain our FY14-17 EPS forecasts and reiterate our Add call and RM1.00
target price, still based on 23.8x CY16 P/E, 40% premium to the payment
sector average, in view of its strong FY13-16 EPS CAGR of 72% and attractive
PEG of 0.57x. Stronger TPA earnings and M&A activities in new markets are
potential catalysts. GHL is our top pick in the domestic technology sector.
What Happened
Share price info
Share price perf. (%)
1M
3M
12M
Relative
-14.5
-8.0
26.3
Absolute
-22.2
-17.4
17.4
Major shareholders
% held
Simon Loh Wee Hian
36.2
Cycas
28.5
Show Style "View Doc Map"
GHL announced that its subsidiary, GHL Philippines, has signed an agreement
with Omnipay, Inc. to acquire merchants under a Transaction Payment
Acquisition (TPA) arrangement. Under the agreement, GHL will serve as a
merchant acquirer for UnionPay International and JCB International cards in
the Philippines. The company expects to start deploying its point-of-sales (POS)
terminals in 1Q15, and is targeting to sign up 300-500 merchants per month to
accept payments using UnionPay and JCB cards. Also, the management is still
confident of securing its TPA arrangement in Malaysia this year.
What We Think
We are positively surprised by GHL’s appointment as a TPA acquirer for
UnionPay and JCB in the Philippines, as we were expecting a TPA arrangement
with a bank which is still awaiting regulatory approval. Nevertheless, we believe
this will help GHL to kick-start its TPA operations in the Philippines. We
understand that about 65% of the country’s population is not covered by the
banking system, which explains the 27m prepaid card issuances vs. only 8m
credit cards. This is positive for GHL as UnionPay and JCB cards are
predominantly used for making prepaid payments in the Philippines. Moreover,
Omnipay plans to issue 6m-8m cards under the UnionPay and JCB brands in
2015, vs. 2.7m currently; this should help GHL’s merchant acquiring process.
What You Should Do
The CIMB Stock Selection Tools (SST) are designed to
complement and enhance the investment decision making
process. The SST incorporate a range of analytical tools,
providing ready access to key company and market data,
valuation tools and charts. If you are interested in subscribing to
the 'Stock Selection Tools', please contact your CIMB account
manager.
Price Close
Financial Summary
Relative to FBMKLCI (RHS)
1.000
0.900
181
0.800
161
0.700
141
0.600
121
0.500
101
0.400
40
81
30
Vol m
20
10
Dec-13
Mar-14
Jun-14
Sep-14
Source: Bloomberg
52-week share price range
0.60
0.91
0.45
Current
Target
Accumulate. The stock had a good run early this year, but is now down 35%
from its year-high of RM0.91. We think the pullback offers an attractive buying
opportunity, in view of its strong TPA-driven earnings growth. Overall, we
think GHL’s growth prospect is intact and are confident of its execution
strategy.
1.00
Revenue (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
Price To Sales (x)
DPS (RM)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-12A
53.5
4.37
0.007
NA
80.19
6.55
0%
37.37
NA
(30.6%)
9.09
11.3%
Dec-13A
64.0
5.26
0.008
12.2%
71.44
5.87
0%
33.33
NA
(23.4%)
6.70
10.8%
Dec-14F
158.2
9.27
0.015
75.8%
40.64
2.38
0%
16.71
24.46
10.1%
3.22
10.7%
0%
0.81
Dec-15F
207.4
15.27
0.024
64.8%
24.67
1.82
0%
12.39
95.92
6.0%
2.85
12.2%
0%
0.96
Dec-16F
253.3
26.50
0.042
73.6%
14.21
1.49
0%
7.83
31.31
(2.6%)
2.37
18.2%
0%
1.00
SOURCE: CIMB, COMPANY REPORTS
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
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Page 9
Property Investment│Malaysia
December 16, 2014
KLCC Property Holdings
FLASH NOTE
KLCCSS MK / KCCP.KL
Market Cap
Avg Daily Turnover
US$3,356m
US$0.74m
RM11,735m
RM2.43m
Free Float
47.4%
1,805 m shares
Current
RM6.50
Target
RM6.90
Prev. Target
Up/Downside
RM6.90
6.2%
Conviction|
|
Touring around Menara
ExxonMobil and Menara 3
CIMB Analyst(s)
————————————————————————————————————————
Faisal SYED AHMAD
T (60) 3 2261 9093
E [email protected]
Share price info
Share price perf. (%)
1M
3M
12M
Relative
4.6
8.1
20.6
Absolute
-1.8
0
Major shareholders
12.8
% held
Petroliam Nasional Berhad
Employees Provident Fund
52.6
8.4
Show Style "View Doc Map"
During our recent tour of some of KLCCP's assets, we were pleasantly
surprised that Menara ExxonMobil still looks relatively new despite being
almost 18 years old. This gives us confidence that it will not face issues
extending its tenancy when it expires in 2017. We were also impressed by
Menara 3, which was more recently built (in 2011) and houses Petronas's
offices and other O&G companies. While the offices were impressive, we
understand that KLCCP's acquisition pipeline remain scarce in the next 1-2
years. We maintain our Hold call and DDM-based target price of RM6.90.
For exposure to M-REITs, we prefer Axis REIT.
What Happened
KLCC Property organised a visit to two of the buildings in its portfolio, Menara
ExxonMobil and Menara 3. Both buildings are located in the vicinity of Kuala
Lumpur City Centre. After the tour of the offices, the company hosted a lunch
session at Mandarin Oriental Hotel where we had the opportunity to discuss
with management the outlook for the company. The visit gave us an
opportunity to see the interior of the two office buildings while KLCCP’s
management gave us insights into the general operations of the buildings.
What We Think
We were pleasantly surprised that the Menara ExxonMobil building still looks
relatively new and well maintained despite being almost 20 years old. The
building, which is fully tenanted by ExxonMobil, was built in 1996. The tenancy
will be expiring in 2017. We understand that negotiations on the next term of
tenancy have already started between the two parties. From our discussions
with management, we believe that the new agreement is likely to be a long-term
agreement as well. During our tour of the Menara 3 building, we noted the
modern interior of the building which was completed in 2011.
What You Should Do
We maintain our Hold call on KLCCP although we note that in the current
market conditions, REITs could provide a safe haven for capital preservation
given its stable dividend yields. Our DDM-based target price is maintained at
RM6.90.
Vol m
Price Close
Financial Summary
Relative to FBMKLCI (RHS)
6.80
124.2
6.30
114.4
5.80
104.7
5.30
12
10
8
6
4
2
95.0
Dec-13
Mar-14
Jun-14
Sep-14
Source: Bloomberg
52-week share price range
6.50
6.92
5.50
Current
Target
6.90
Total Net Revenues (RMm)
Operating EBITDA (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
DPS (RM)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-12A
1,178
890
373.2
0.40
31.6%
16.27
0.16
2.46%
13.39
23.69
14.4%
0.83
5.2%
Dec-13A
1,279
962
570.8
0.44
10.8%
11.15
0.26
4.03%
18.22
11.54
12.8%
1.56
10.8%
Dec-14F
1,357
1,045
693.5
0.38
(13.2%)
16.92
0.33
5.14%
16.85
15.32
12.4%
1.57
9.2%
Dec-15F
1,429
1,080
729.0
0.40
5.1%
16.10
0.36
5.59%
16.35
13.87
11.7%
1.55
9.7%
Dec-16F
1,504
1,130
766.3
0.42
5.1%
15.31
0.37
5.68%
15.62
13.06
10.6%
1.53
10.1%
SOURCE: CIMB, COMPANY REPORTS
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
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Page 10
Property Devt & Invt│Malaysia
December 16, 2014
SP Setia
4QFY14 RESULTS NOTE
SPSB MK / SETI.KL
Market Cap
Avg Daily Turnover
US$2,352m
US$0.95m
RM8,224m
RM3.14m
Free Float
33.5%
2,538 m shares
Current
RM3.24
Target
RM3.34
Prev. Target
Up/Downside
RM3.38
3.1%
Conviction|
|
Still top dog in property sector
CIMB Analyst(s)
T (60) 3 2261 9088
E [email protected]
SP Setia’s FY10/14 results were in line as final core net profit made up 97% of
our forecast and 101% consensus’s estimates. New sales of RM4.6bn were 44%
lower yoy and missed its full-year sales target of RM5bn by 8%. We fine-tune
our EPS forecasts for housekeeping purposes, but keep our target price basis
of a 25% discount to RNAV (lowered slightly from RM4.51 to RM4.45). SP
Setia continues to be a Hold as the timing of its key re-rating catalyst, i.e.
potential M&A activity, remains uncertain. Our picks for property sector
exposure remain Mah Sing Group and Eco World Development.
Share price info
Final results in line
—————————————————————————————————————————
Terence WONG, CFA
Share price perf. (%)
1M
3M
12M
17.6
Relative
7.1
7.0
Absolute
-0.6
-2.4
Major shareholders
8.7
% held
PNB
KWAP
EPF
66.5
8.6
5.1
Show Style "View Doc Map"
Final results were in line with expectations, as core net profit came in only 3%
below our forecast and 1% above consensus. But SP Setia disappointed on the
dividend front as it proposed a final dividend of 5.7 sen, bringing the full year
to 9.7sen, below our forecast of 12 sen.
FY14’s new sales of RM4.6bn
The group chalked up RM4.6bn in sales in FY14 (Nov 13 to Oct 14), an 8%
decline yoy. The Klang Valley was still the largest contributor to new sales
(RM2.1bn or 45%), while Johor came in a distant second (RM500m or 11%).
Penang and Sabah contributed a combined RM224m or 5%, while overseas
projects (Singapore, Melbourne and London) contributed RM1.8bn or 39%. 4Q
sales fell 33% qoq to RM0.9bn as 3Q was boosted by the launch of Phase 2 of
the Battersea project in London. Unbilled sales increased from RM10.8bn in
3Q to RM11.1bn.
Analysts briefing highlights
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SP Setia held its usual analysts briefing during which acting CEO Dato' Voon
Tin Yow ran through the group's performance in FY14 and its targets for FY15.
There were no major surprises from the briefing. The group is aiming to
maintain sales at RM4.6bn in FY15, with a local:foreign split of 60:40. It is
targeting to launch two new projects in the next financial year including Setia
Eco Templer and Setia Sky Vista. Setia Eco Templer has a GDV of RM1.9bn and
is a residential-cum-commercial project, with residential units priced between
RM700k and RM2m. Setia Sky Vista is a condo in Penang located 5 minutes
from the Bayan Lepas Free Trade Zone, with a GDV of RM320m.
Results Comparison
FYE Oct (RM m)
Revenue
Operating costs
EBIT margin (%)
EBIT
Interest expense
Interest & invt inc
Associates' contrib
Exceptionals
Pretax profit
Tax
Tax rate (%)
Minority interests
Net profit
Core net profit
EPS (sen)
Core EPS (sen)
4Q
FY14
1,233.5
(962.2)
22.0
271.3
(16.0)
18.9
(41.1)
(10.8)
222.3
(67.4)
30.3
(23.6)
131.3
142.1
5.2
5.6
4Q
3Q
4QFY14 4QFY13
Prev.
yoy % chg
qoq % chg
yoy % chg
Comments
FY13
FY14
cum
cum
FY14F
27.7 902.7
36.7 3,810.1 3,261.2
16.8 4,580.9 83% of full year forecast
965.7
33.0 (655.2)
46.9 (2,876.5) (2,536.8)
13.4 (3,842.6)
(723.5)
25.1
27.4
24.5
22.2
10.3
16.1 Above expectations
12.0 247.5
9.6
28.9
242.2
933.6
724.4
738.3
(27.3) (14.0)
14.6
3.8
(22.0)
(60.0)
(57.8)
(60.6) Debt e increased lower 4% qoq to RM4.38bn
49.5
75.7
68.4
12.7
10.8
36.1
21.5
29.5 Cash fell 1% qoq to RM2.73bn
206.9
nm
163.0
(13.4)
(13.0)
(78.0)
(29.7)
0.0
nm
nm
nm
0.0
(43.7)
(109.3)
0.0
(48.0) LTIP expenses, GST impact and forex translations
1.3 187.6
18.5
9.7
219.5
722.4
658.4
659.2 Made up 110% of forecast
13.1
10.1
18.2
(59.6)
(61.2)
(205.7)
(174.0)
(174.6) Above corporate tax rate due to non-tax
7.7
27.2
32.6
28.5
26.4
26.5 deductible expenses
(21.9) (23.1)
2.2
67.9
(30.2)
(111.0)
(66.1)
0.0
1.2 103.3
27.1
(3.0)
129.7
405.7
418.3
484.6 Made up 84% of forecast
9.6 147.0
(3.3)
23.1
129.7
515.0
418.3
532.6 Made up 97% of forecast
(1.5)
26.0
(9.4)
5.3
4.1
16.3
18.0
19.7
6.2
(3.3)
12.7
5.3
5.8
20.3
18.0
21.7
One third
Half page
Two thirds
SOURCE: CIMB, COMPANY REPORTS
Full page
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Page 11
Rubber Gloves│Malaysia
December 17, 2014
Top Glove Corporation
1QFY15 RESULTS NOTE
TOPG MK / TPGC.KL
Market Cap
Avg Daily Turnover
US$765.0m
US$0.95m
RM2,669m
RM3.14m
Free Float
49.8%
620.6 m shares
Current
RM4.30
Target
RM4.31
Prev. Target
Up/Downside
RM4.65
0.3%
Conviction|
|
Better showing
CIMB Analyst(s)
—————————————————————————————————————————
EING Kar Mei, CFA
T (60) 3 2261 9085
E [email protected]
Top Glove’s 1QFY15 core net profit was within expectations, at 28% of our
forecast and 27% of consensus’ estimates. Revenue dropped 1.1% due to lower
selling prices, while core net profit improved 5.5% with the turnaround of its
China business. We maintain our FY15-17 net profit forecasts and our Hold
call but our target price falls to RM4.31 (13.5x CY16 P/E, a 20% discount to
Hartalega’s target P/E) as Top Glove’s target P/E is cut in line with that of
Hartalega and the market. No dividend was declared, in line with our
expectations. We prefer Kossan for exposure to the sector.
Turnaround of China operations boosts 1Q net profit
Share price info
Share price perf. (%)
1M
3M
12M
Relative
-1.8
-3.4
-17.0
Absolute
-9.5
-12.8
Major shareholders
-25.9
% held
Tan Sri Dato Sri Lim and family
KWAP
EPF
38.0
7.0
5.2
Show Style "View Doc Map"
Top Glove’s 1QFY15 revenue declined 1.1%, mainly due to the weaker selling
prices resulting from lower natural latex (-24.5% yoy) and nitrile (-1%) costs,
which offset the effects of higher sales volume (utilisation rate improved from
70% in 1QFY14 to 75% in 1QFY15; sales volume grew 4%). Core net profit
(excluding fair value loss on foreign exchange contracts of RM3.9m) however
grew 5.5% as its China vinyl gloves business turned around, with a RM1.5m
profit in 1QFY15 vs. a RM5.2m loss in 1QFY14. Although raw material prices
declined and the USD strengthened against the RM, the positive impact from
these factors on nitrile gloves was not substantial given the more intense
competition that resulted in Top Glove sharing some of the cost savings with its
customers. The favourable factors however had some positive impact on
natural rubber gloves’ margins given the less intense competition in the natural
rubber gloves segment. On a qoq basis, given the marginally higher sales
volume (+1%) in both segments, the lower 1Q revenue (-2%) was due to the
lower raw material prices (natural latex -12.1%, nitrile -4.6%). PBT grew ~20%
mainly driven by the higher margin from latex gloves on lower latex prices and
stronger USD against RM.
More new nitrile capacity coming on-stream
The CIMB Stock Selection Tools (SST) are designed to
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An additional six nitrile glove production lines at Factory 27 in Lukut started
operations in Sep 2014. The group is targeting to complete the installation of
production lines at Factory 29 and commence operations by Jan 2015. This will
boost its production capacity from the current 42.6bn to 44.6bn pieces of
gloves per annum.
Results Comparison
FYE Aug (RM m)
Revenue
Operating costs
EBITDA
EBITDA margin (%)
Depn & amort.
EBIT
Interest expense
Interest & invt inc
Associates' contrib
Exceptionals
Pretax profit
Tax
Tax rate (%)
Minority interests
Net profit
Core net profit
EPS (sen)
Core EPS (sen)
1QFY15 1QFY14
567.6
574.0
(481.7) (493.5)
85.9
80.4
15.1
14.0
(23.4)
(21.8)
62.6
58.6
(0.9)
(0.7)
4.1
2.4
(2.9)
1.0
(3.9)
0.4
59.1
61.8
(10.0)
(9.9)
17.0
16.0
(0.3)
(1.7)
48.7
50.3
52.6
49.8
7.8
8.1
8.5
8.0
yoy % 4QFY14
chg
(1.1) 580.2
(2.4) (516.7)
6.8
63.5
1.1
10.9
7.0
(23.2)
6.8
40.4
(0.4)
68.7
4.1
1.2
2.4
(4.5)
47.7
1.5
(1.5)
1.0
3.1
(80.2)
(0.3)
(3.2)
45.9
5.5
43.5
(3.2)
7.4
5.5
7.0
qoq %
Prev.
chg FY15F
(2.2) 2338.2
(6.8) (2011.4)
35.3
326.8
4.2
14.0
1.0 (109.2)
55.0
217.6
115.8
(1.5)
0.4
16.5
(1.5)
23.8
231.1
577.4
(41.6)
13.9
11.1
0.0
6.1
189.5
20.9
189.5
6.1
30.5
20.9
30.5
Comments
Revenue declined due to lower average selling prices
Higher as its China operation became profitable
PPE of RM1017.1m as at end-Nov 2014
Total borrowings of RM381.7m as at end-Nov 2014
Total cash of RM146.5m as at end-Nov 2014
Fair value gain or loss on foreign exchange contracts
25.6% of our full year estimates
Lower due to the availability of allowances and incentives
Mainly due to its 74% owned Thailand manufacturing plant
Accounted for 25.6% of our full year estimates
Excluding fair value gain or loss on foreign exchange contracts
Based on 620.6m total shares outstanding
Based on 620.6m total shares outstanding
SOURCE: CIMB, COMPANY REPORTS
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
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Page 12
Insurance - Life│Taiwan
December 16, 2014
Cathay Financial
FLASH NOTE
2882 TT / 2882.TW
Market Cap
Avg Daily Turnover
US$18,366m
US$27.43m
NT$575,395m
NT$838.8m
Free Float
58.0%
12,563 m shares
Current
NT$45.80
Target
NT$53.00
Prev. Target
Up/Downside
NT$53.00
15.7%
Conviction|
|
Another southbound move
CIMB Analyst(s)
————————————————————————————————————————
Nora HOU
Strategically, we appreciate Cathay FHC’s decision to acquire RCBC. The
anticipated synergy/collaboration resulting from the transaction should
catalyse Cathay FHC’s share price, in our view, but the sentiment will be
short-lived due to the minute earnings contribution. We maintain our Hold
rating and SOP-based target price. We prefer Fubon FHC.
What Happened
T (886) 2 8729 8373
E [email protected]
Share price info
Share price perf. (%)
1M
3M
12M
Relative
-7.6
-5.9
-7.5
Absolute
-8.0
-7.9
0.2
Major shareholders
% held
Tsai Family
38.0
Show Style "View Doc Map"
Cathay Life (subsidiary of Cathay FHC) will sign definitive agreements on 17
Dec to acquire a 20% stake in Rizal Commercial Banking Corporation (RCBC)
at Php64 per share or a total Php17.92bn (around NT$12.55bn). This
represents a P/BV multiple of 1.57x. Cathay FHC will obtain three out of
RCBC’s 15 board seats. The deal is scheduled for completion by end-1Q15,
subject to regulatory approval. Cathay Life may continue to increase its stake in
RCBC, up to 30%, over the next one year, subject to market conditions.
What We Think
We are essentially neutral on this event. Firstly, the transaction should help
Cathay FHC expand further in ASEAN. With a network of 450 branches, RCBC
would offer Cathay FHC a quick access to the Philippine market. Secondly, the
acquisition would enhance Cathay Life’s overseas investment return given
RCBC’s 12-15% ROE. That said, it would contribute investment income of only
NT$670m-700m per year, or less than 1.5% of Cathay FHC’s bottomline, on
our estimation. Thirdly, we expect more financial players to move southbound.
Compared to the mainland Chinese market, some Southeast Asian countries
(e.g. the Philippines) appear to be opening their doors wider to Taiwanese
banks. Lastly, we see increased earnings from overseas operations (from 1/3
currently to potentially 40-45% of the banks’ bottomline in 3-5 years).
What You Should Do
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valuation tools and charts. If you are interested in subscribing to
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manager.
Price Close
Relative to TAIEX (RHS)
55.0
53.0
51.0
49.0
47.0
45.0
43.0
41.0
80
108.0
104.4
100.9
97.3
93.7
90.1
86.6
83.0
60
Vol m
40
20
Dec-13
Mar-14
Jun-14
Sep-14
Source: Bloomberg
52-week share price range
45.80
53.90
42.30
Current
Target
53.00
While having outperformed its financial peers since early-May due to its
well-above-average earnings momentum, Cathay FHC’s share price has
dropped 8% in the past three months. We attribute this to: 1) profit-taking
among investors on the back of the company’s earnings peak before a big
retreat in 4Q14, and 2) general correction in the local bourse. While the
overseas M&A would boost share sentiment, it has little immediate earnings
impact. We believe the current valuation of 1.3-1.4x FY15 P/BV fairly reflects
the core/non-core expansion in FY14 along with a significant contraction in
FY15 as we anticipate. We favour Fubon FHC in the insurance space for its
better-quality earnings stream.
Financial Summary
Net Interest Income (NT$m)
Total Gross Premiums (NT$m)
Total Net Revenues (NT$m)
Total Provision Charges (NT$m)
Net Profit (NT$m)
Core EPS (NT$)
Core EPS Growth
FD Core P/E (x)
DPS (NT$)
Dividend Yield
BVPS (NT$)
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-12A
20,281
467,774
642,281
(2,050)
16,172
1.52
40.4%
30.05
0.70
1.53%
22.53
2.03
7.1%
Dec-13A
21,915
462,671
627,187
(542)
28,816
2.52
65.6%
18.14
1.50
3.28%
31.37
1.46
9.3%
Dec-14F
25,481
503,026
706,650
(866)
49,519
4.04
59.9%
11.34
1.97
4.30%
32.55
1.41
12.6%
1.10
Dec-15F
26,783
639,211
825,379
(643)
35,085
2.79
(30.8%)
16.40
1.40
3.05%
34.34
1.33
8.3%
0.96
Dec-16F
28,396
679,444
875,859
(627)
36,592
2.91
4.3%
15.72
1.46
3.18%
36.08
1.27
8.3%
0.99
SOURCES: CIMB, COMPANY REPORTS
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
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Page 13
Telco - Others│Thailand
December 16, 2014
Thaicom
FLASH NOTE
THCOM TB / THCOM.BK
Market Cap
Avg Daily Turnover
US$1,096m
US$4.55m
THB36,166m
THB148.3m
Free Float
58.9%
1,096 m shares
Current
THB33.00
Target
THB52.00
Prev. Target
Up/Downside
THB52.00
57.6%
Conviction|
|
Solid fundamentals
CIMB Analyst(s)
Thaicom’s CEO and CFO met 19 fund managers in Singapore during 8-9 Dec.
Most fund managers were quite receptive to Thaicom's encouraging earnings
growth story, driven by Thaicom 6 and 7 in FY15 and Thaicom 8 in FY16. We
maintain our estimates, SOP-based target price and Add rating. Potential
re-rating catalysts are possible earnings and dividend surprises.
————————————————————————————————————————
Pisut NGAMVIJITVONG
What Happened
T (66) 2 657 9226
E [email protected]
Share price info
Share price perf. (%)
1M
3M
12M
Relative
-4.0
-9.0
-25.6
Absolute
-10.2
-15.4
Major shareholders
-15.4
% held
Intouch Corporation Pcl.
Thai NVDR Co., Ltd.
41.1
8.3
HSBC (Singapore) Nominees Pte Ltd
2.4
Show Style "View Doc Map"
Thaicom’s CEO, Ms Suphajee Suthumpun, and CFO, Mr Vuthi
Asavasermcharoen, met 19 fund managers in Singapore during 8-9 Dec. Nine
of these fund managers have a position in the stock while four sold their
holdings after the share price had a good run early this year. Six fund managers
are new to the stock. Most were positive on its promising earnings growth
outlook from 1) the sale of Thaicom 7’s remaining 50% capacity, 2) the
potential 50% capacity presales of Thaicom 8, and 3) the progress of Thaicom
4’s capacity sale in India. Key concerns raised were 1) unfavourable political
developments and 2) the competition in the free TV market.
What We Think
The recent decline in the share price (down 13% in ten trading days vs. SET’s
-8%) could be due to 1) the market correction, 2) the removal from the SET50
index and 3) negative political developments; the first two have nothing to do
with Thaicom’s fundamentals. Also, we think the negative political
developments would just be noise at this point, and would not hurt Thaicom’s
fundamentals. First, we believe that the National Satellite project would not
proceed as the project could not justify any economic or political reason.
Second, the auction of satellite uplink and downlink spectrum would go against
the international practice, which would make it difficult to come up with any
acceptable auction model or reserve price. On top of that, we cannot think of
any potential bidders with a Thai-dominant ownership, other than Thaicom.
What You Should Do
The CIMB Stock Selection Tools (SST) are designed to
complement and enhance the investment decision making
process. The SST incorporate a range of analytical tools,
providing ready access to key company and market data,
valuation tools and charts. If you are interested in subscribing to
the 'Stock Selection Tools', please contact your CIMB account
manager.
Price Close
Financial Summary
Relative to SET (RHS)
44.0
113.0
42.0
105.5
40.0
98.0
38.0
90.5
36.0
83.0
34.0
75.5
32.0
20
68.0
15
Vol m
10
5
Dec-13
Mar-14
Jun-14
Sep-14
Source: Bloomberg
52-week share price range
Current
Target
Thaicom is our top pick in the telecom sector. We like Thaicom as it provides
essential TV broadcasting infrastructure in Thailand, and it would benefit from
1) analogue-to-digital terrestrial TV system transition, 2) SD-to-HD channel
upgrade in the pay TV business, and 3) a high operating leverage. Potential
re-rating catalysts include upside surprises from 1) higher utilisation of
Thaicom 4 and Thaicom 7, 2) higher EBITDA margin from THB depreciation
against the US$, and 3) a higher dividend payout ratio. Thaicom’s valuation is
also cheap at 14x FY15 P/E for 36% EPS growth and 5% dividend yield.
Revenue (THBm)
Operating EBITDA (THBm)
Operating EBITDA Margin
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-12A
7,266
3,892
53.6%
174
0.40
NA
82.85
0.40
1.21%
10.44
NA
34.4%
3.1%
Dec-13A
7,896
3,750
47.5%
1,128
1.14
186%
29.01
0.45
1.36%
10.65
NA
31.5%
8.4%
Dec-14F
9,769
5,198
53.2%
1,723
1.70
49%
19.44
0.85
2.57%
6.93
NA
7.0%
11.5%
0%
0.99
Dec-15F
10,832
5,813
53.7%
2,524
2.30
36%
14.33
1.73
5.23%
5.49
9.08
(14.6%)
14.3%
0%
1.10
Dec-16F
11,287
5,916
52.4%
2,666
2.43
6%
13.57
1.82
5.53%
4.84
8.68
(30.1%)
14.1%
0%
1.02
SOURCE: CIMB, COMPANY REPORTS
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
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Page 14
Asia Pacific Daily│Equity Research Reports…
December 17, 2014
RESEARCH MANAGEMENT
Chris HUNT
Regional Head of Research and Product Management
(852) 2539 1315
[email protected]
REGIONAL SECTOR HEADS
Jason TODD, CFA
Strategy
(852) 2532 1123
[email protected]
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Economics
(65) 6210 8412
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Accounting and Database
(61) 2 9694 6056
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Quant Research
(61) 2 9694 6058
[email protected]
Trevor KALCIC, CFA
Banks
(852) 2539 1323
[email protected]
Varun LOHCHAB
Consumer
(91) 22 6602 5181
[email protected]
Michael EVANS
Metals & Mining
(61) 2 9694 6090
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KJ KWANG
Offshore & Marine
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Plantations
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[email protected]
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Telecom
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Transportation
(60) 3 2261 9072
[email protected]
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(82) 2 6730 6121
[email protected]
Terence WONG, CFA
Malaysia
(60) 3 2261 9088
[email protected]
Kenneth NG, CFA
Singapore
(65) 6210 8610
[email protected]
Eric LIN
Taiwan
(886) 2 8729 8380
eric.lin @cimb.com
Kasem PRUNRATANAMALA, CFA
Thailand
(66) 2 657 9221
[email protected]
Michael KOKALARI, CFA
Vietnam
(84) 907 974408
[email protected]
Edser TRINIDAD
Philippines
(63) 2 836 3933
[email protected]
Yolan SEIMON
Sri Lanka
(94) 11 2306273
[email protected]
Coverage via partnership
arrangement with SB Equities
Coverage via partnership
arrangement with John Keells Stock Brokers
}
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Asia Pacific Daily│Equity Research Reports…
December 17, 2014
#05
DISCLAIMER
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}
Page 16
Asia Pacific Daily│Equity Research Reports…
December 17, 2014
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Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMB has no obligation to update
its opinion or the information in this research report.
This publication is strictly confidential and is for private circulation only to clients of CIMB. This publication is being supplied to you strictly on the
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course of, and for the purposes of their business, habitually invest money pursuant to Section 3(2)(a)(ii) of the Securities Act 1978.
}
Page 17
Asia Pacific Daily│Equity Research Reports…
December 17, 2014
Singapore: This report is issued and distributed by CIMB Research Pte Ltd (“CIMBR”). Recipients of this report are to contact CIMBR in
Singapore in respect of any matters arising from, or in connection with, this report. The views and opinions in this research report are our own as
of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial
Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBR has no obligation to update its
opinion or the information in this research report.
This publication is strictly confidential and is for private circulation only. If the recipient of this research report is not an accredited investor, expert
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indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMBR..
As of December 16, 2014, CIMBR does not have a proprietary position in the recommended securities in this report.
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The views and opinions in this research report are our own as of the date hereof and are subject to change, and this report shall not be
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not been and will not be registered with the Financial Supervisory Commission of the Republic of China pursuant to relevant securities laws and
regulations and may not be offered or sold within the Republic of China through a public offering or in circumstances which constitutes an offer or
a placement within the meaning of the Securities and Exchange Law of the Republic of China that requires a registration or approval of the
Financial Supervisory Commission of the Republic of China.
Thailand: This report is issued and distributed by CIMB Securities (Thailand) Company Limited (CIMBS). The views and opinions in this
research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or
the rules of the Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBS has no
obligation to update its opinion or the information in this research report.
This publication is strictly confidential and is for private circulation only to clients of CIMBS. This publication is being supplied to you strictly on the
basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any
means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written
consent of CIMBS.
CIMB Securities (Thailand) Co., Ltd. may act or acts as Market Maker and issuer including offering of Derivative Warrants Underlying securities
of the following securities. Investors should carefully read and study the details of the derivative warrants in the prospectus before making
investment decisions.
AAV, ADVANC, AMATA, ANAN, AOT, AP, ASP, BANPU, BAY, BBL, BCH, BCP, BEC, BECL, BGH, BH, BIGC, BJC, BJCHI, BLA, BLAND, BMCL,
BTS, CENTEL, CK, CPALL, CPF, CPN, DCC, DELTA, DEMCO, DTAC, EARTH, EGCO, ERW, ESSO, GFPT, GLOBAL, GLOW, GUNKUL,
HEMRAJ, HMPRO, INTUCH, IRPC, ITD, IVL, JAS, KBANK, KCE, KKP, KTB, KTC, LH, LOXLEY, LPN, M, MAJOR, MC, MCOT, MEGA, MINT,
NOK, NYT, PS, PSL, PTT, PTTEP, PTTGC, QH, RATCH, ROBINS, RS, SAMART, SCB, SCC, SCCC, SIRI, SPALI, SPCG, SRICHA, STA, STEC,
STPI, SVI, TASCO, TCAP, TFD, THAI, THCOM, THRE, THREL, TICON, TISCO, TMB, TOP, TPIPL, TTA, TTCL, TTW, TUF, UMI, UV, VGI, TRUE,
WHA.
Corporate Governance Report:
The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the
policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the
Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public
investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information.
The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may
be changed after that date. CIMBS does not confirm nor certify the accuracy of such survey result.
Score Range:
Description:
90 - 100
Excellent
80 - 89
Very Good
70 - 79
Good
Below 70 or
N/A
No Survey Result
United Arab Emirates: The distributor of this report has not been approved or licensed by the UAE Central Bank or any other relevant licensing
authorities or governmental agencies in the United Arab Emirates. This report is strictly private and confidential and has not been reviewed by,
deposited or registered with UAE Central Bank or any other licensing authority or governmental agencies in the United Arab Emirates. This report
is being issued outside the United Arab Emirates to a limited number of institutional investors and must not be provided to any person other than
the original recipient and may not be reproduced or used for any other purpose. Further, the information contained in this report is not intended to
lead to the sale of investments under any subscription agreement or the conclusion of any other contract of whatsoever nature within the territory
}
Page 18
Asia Pacific Daily│Equity Research Reports…
December 17, 2014
of the United Arab Emirates.
United Kingdom and Europe: In the United Kingdom and European Economic Area, this report is being disseminated by CIMB Securities (UK)
Limited (“CIMB UK”). CIMB UK is authorised and regulated by the Financial Conduct Authority and its registered office is at 27 Knightsbridge,
London, SW1X 7YB. This report is for distribution only to, and is solely directed at, selected persons on the basis that those persons: (a) are
persons that are eligible counterparties and professional clients of CIMB UK; (b) have professional experience in matters relating to investments
falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”); (c) are
persons falling within Article 49 (2) (a) to (d) (“high net worth companies, unincorporated associations etc”) of the Order; (d) are outside the
United Kingdom; or (e) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the
Financial Services and Markets Act 2000) in connection with any investments to which this report relates may otherwise lawfully be
communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This report is directed only at
relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which
this report relates is available only to relevant persons and will be engaged in only with relevant persons.
Only where this report is labelled as non-independent, it does not provide an impartial or objective assessment of the subject matter and does
not constitute independent "investment research" under the applicable rules of the Financial Conduct Authority in the UK. Consequently, any
such non-independent report will not have been prepared in accordance with legal requirements designed to promote the independence of
investment research and will not subject to any prohibition on dealing ahead of the dissemination of investment research.
United States: This research report is distributed in the United States of America by CIMB Securities (USA) Inc, a U.S.-registered broker-dealer
and a related company of CIMB Research Pte Ltd, CIMB Investment Bank Berhad, PT CIMB Securities Indonesia, CIMB Securities (Thailand)
Co. Ltd, CIMB Securities Limited, CIMB Securities (Australia) Limited, CIMB Securities (India) Private Limited, and is distributed solely to persons
who qualify as "U.S. Institutional Investors" as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This communication is only
for Institutional Investors whose ordinary business activities involve investing in shares, bonds and associated securities and/or derivative
securities and who have professional experience in such investments. Any person who is not a U.S. Institutional Investor or Major Institutional
Investor must not rely on this communication. The delivery of this research report to any person in the United States of America is not a
recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. CIMB
Securities (USA) Inc, is a FINRA/SIPC member and takes responsibility for the content of this report. For further information or to place an order
in any of the above-mentioned securities please contact a registered representative of CIMB Securities (USA) Inc.
Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to
professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (Thai IOD) in 2014.
AAV – Very Good, ADVANC – Very Good, AEONTS – not available, AMATA - Good, ANAN – Very Good, AOT – Very Good, AP - Good, ASK – Very Good,
ASP – Very Good, BANPU – Very Good , BAY – Very Good , BBL – Very Good, BCH – not available, BCP - Excellent, BEAUTY – Good, BEC - Good, BECL –
Very Good, BGH - not available, BH - Good, BIGC - Very Good, BJC – Good, BLA – Very Good, BMCL - Very Good, BTS - Excellent, CCET – Good,
CENTEL – Very Good, CHG – not available, CK – Very Good, CPALL – not available, CPF – Very Good, CPN - Excellent, DELTA - Very Good, DEMCO – Good,
DTAC – Very Good, EA - Good, ECL – not available, EGCO - Excellent, GFPT - Very Good, GLOBAL - Good, GLOW - Good, GRAMMY - Excellent, HANA Excellent, HEMRAJ – Very Good, HMPRO - Very Good, ICHI - not available, INTUCH - Excellent, ITD – Good, IVL - Excellent, JAS – not available, JUBILE –
not available, KAMART – not available, KBANK - Excellent, KCE - Very Good, KGI – Good, KKP – Excellent, KTB - Excellent, KTC – Good, LH - Very Good,
LPN – Very Good, M - not available, MAJOR - Good, MAKRO – Good, MBKET – Good, MC – Very Good, MCOT – Very Good, MEGA – Good, MINT Excellent, OFM – Very Good, OISHI – Good, PS – Very Good, PSL - Excellent, PTT - Excellent, PTTEP - Excellent, PTTGC - Excellent, QH – Very Good,
RATCH – Very Good, ROBINS – Very Good, RS – Very Good, SAMART - Excellent, SAPPE - not available, SAT – Excellent, SAWAD – not available, SC –
Excellent, SCB - Excellent, SCBLIF – Good, SCC – Very Good, SCCC - Good, SIM - Excellent, SIRI - Good, SPALI - Excellent, STA – Very Good, STEC - Good,
SVI – Very Good, TASCO – Good, TCAP – Very Good, THAI – Very Good, THANI – Very Good, THCOM – Very Good, THRE – not available, THREL – Good,
TICON – Good, TISCO - Excellent, TK – Very Good, TMB - Excellent, TOP - Excellent, TRUE – Very Good, TTW – Very Good, TUF - Good, VGI – Very Good,
WORK – not available.
}
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Asia Pacific Daily│Equity Research Reports…
December 17, 2014
CIMB Recommendation Framework
Stock Ratings
Definition:
Add
The stock’s total return is expected to exceed 10% over the next 12 months.
Hold
The stock’s total return is expected to be between 0% and positive 10% over the next 12 months.
Reduce
The stock’s total return is expected to fall below 0% or more over the next 12 months.
The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward
net dividend yields of the stock. Stock price targets have an investment horizon of 12 months.
Sector Ratings
Overweight
Neutral
Underweight
Definition:
An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation.
A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation.
An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.
Country Ratings
Overweight
Neutral
Underweight
Definition:
An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark.
A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark.
An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.
*Prior to December 2013 CIMB recommendation framework for stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand,
Jakarta Stock Exchange, Australian Securities Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange were
based on a stock’s total return relative to the relevant benchmarks total return. Outperform: expected to exceed by 5% or more over the next 12 months.
Neutral: expected to be within +/-5% over the next 12 months. Underperform: expected to be below by 5% or more over the next 12 months. Trading Buy:
expected to exceed by 3% or more over the next 3 months. Trading Sell: expected to be below by 3% or more over the next 3 months. For stocks listed on
Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Outperform: Expected positive total returns of 10% or
more over the next 12 months. Neutral: Expected total returns of between -10% and +10% over the next 12 months. Underperform: Expected negative total
returns of 10% or more over the next 12 months. Trading Buy: Expected positive total returns of 10% or more over the next 3 months. Trading Sell: Expected
negative total returns of 10% or more over the next 3 months.
}
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