20180528-兴业金融证券-Regional_Morning_Cuppa_7页_294kb

Regional Morning Cuppa Summary

Core Content Overview

This document is a summary of investment research and analysis from RHB Group, focusing on stock calls, thematic reports, and market outlooks for various regions, primarily Malaysia, Thailand, Indonesia, and Hong Kong. It outlines the firm's contrarian investment ideas, key recommendations, and market insights, while also providing important disclaimers and restrictions on distribution.

Main Thematic Reports

1. Regional Thematic: Against The Grain - Our Contrarian Calls

• This report highlights non-consensus stock calls based on fundamental bottom-up analysis of the ASEAN plus Hong Kong market.
• It identifies companies where there is a disconnect between fundamentals and pricing.
• The analysis considers views that differ from the market consensus and interpretations that challenge prevailing market wisdom.

2. Malaysia Thematic Report: From GST to SST – Return Of SST – Impact On Economy And Equities

• The return of Sales and Services Tax (SST) is expected to mitigate the revenue loss from the zero-rating of Goods and Services Tax (GST).
• The projected revenue loss is estimated at MYR1.7bn or 0.1% of GDP.
• This shift is anticipated to support the economy and equities through increased government revenue and potential expenditure cuts.

Key Investment Calls and Analysis

Malaysia

• IHH Healthcare:

  • 1Q18 NP was MYR57m, down 88% YoY, but core NP was MYR224m (+11% YoY).
  • EBITDA of MYR609m (+9% YoY) was in line with expectations.
  • Outlook remains positive due to regional expansion and growth in China and India.
  • Target Price (TP): MYR6.26, with a TP of MYR7.00 (12% upside).

• Tong Herr Resources:

  • Dividend yield remains attractive.
  • TP: THR MK, Rating: BUY.

• Eastern & Oriental:

  • Launching STP2A in 2Q19.
  • TP: EAST MK, Rating: BUY.

• Cocoaland:

  • Resilient sales performance.
  • TP: COLA MK, Rating: BUY.

• Genting Malaysia:

  • Anticipated strong performance due to theme park openings.
  • TP: GENT MK, Rating: BUY.

• Southern Acids Malaysia:

  • Prospects for value unlocking seem distant.
  • Rating: NEUTRAL.

• AEON Co M:

  • Acts as a proxy for consumer spending recovery.
  • TP: AEON MK, Rating: BUY.

• 7-Eleven Malaysia:

  • Potential for improved cost efficiency.
  • TP: SEM MK, Rating: NEUTRAL.

• MGB:

  • Relatively subdued performance in 2018.
  • Rating: NEUTRAL.

• Media Prima:

  • Embracing change in the market.
  • Rating: NEUTRAL.

• Tasco:

  • Missed FY18 results due to growing pains.
  • Rating: NEUTRAL.

Hong Kong

• Banks:

  • Overweight recommendation due to limited impact from liquidity risk measures.
  • Rating: OVERWEIGHT.

• China State Construction:

  • TP: 3311HK, Rating: BUY.

• Malayan Banking:

  • Asset quality risk is abating.
  • TP: MAY MK, Rating: BUY.

• Genting Malaysia:

  • Strong performance expected from theme parks.
  • TP: GENM MK, Rating: BUY.

• Dairy Farm:

  • Expected to benefit from store expansion and increased Chinese visitor arrivals.
  • TP: DFI SP, Rating: BUY.

• Sino-Thai:

  • Likely to maintain top position in upcoming MRT bids.
  • TP: STEC TB, Rating: BUY.

Investment Rating Definitions

Key Disclaimers and Restrictions

• This report is for informational purposes only and does not constitute investment advice.
• RHB does not guarantee the accuracy or completeness of the information provided.
• The report may contain forward-looking statements that are subject to risks and uncertainties.
• Distribution and use of the report are subject to legal restrictions depending on the jurisdiction.
• RHB may have interests in the companies covered and may provide investment banking services, which could lead to conflicts of interest.
• The report is confidential and may not be reproduced or distributed without prior written consent.

Distribution Restrictions by Jurisdiction

Malaysia

• Issued and distributed by RHB Research Institute Sdn Bhd.
• No obligation to update the report.

Thailand

• Issued by RHB Securities (Thailand) PCL, a licensed securities company.
• The report does not endorse or confirm the results of corporate governance reports.

Indonesia

• Issued by PT RHB Sekuritas Indonesia.
• Not affiliated with the subject companies.
• Information is not considered insider information.

Singapore

• Issued by RHB Research Institute Singapore Pte Ltd.
• Only for accredited, expert, and institutional investors.
• Distribution to these categories does not require disclosure of interests under certain regulations.

Hong Kong

• Issued by RHB Securities Hong Kong Limited.
• The firm may have conflicts of interest due to business relationships with covered companies.
• Not intended for solicitation by RHB.

United States

• Distributed solely to "major" U.S. institutional investors.
• Not registered as a broker-dealer in the U.S.
• Access via electronic platforms is restricted to specific investors.

Recent Reports

• A series of recent reports are available for download, including:
  • RHB Regional Morning Cuppa - 28 May 2018
  • RHB Regional Morning Cuppa - 25 May 2018
  • RHB Regional Morning Cuppa - 24 May 2018
  • ... and more (up to 2 May 2018).

Conclusion

The report provides a comprehensive view of investment opportunities and risks in the ASEAN plus Hong Kong region, emphasizing contrarian stock calls and thematic insights. It highlights key sectors such as healthcare, consumer non-cyclical, and real estate, with a focus on companies showing potential despite market challenges. The document also includes detailed disclaimers and distribution restrictions, underscoring the importance of independent judgment and compliance with local regulations.