20140526-大和证券-Asia_Pacific_Daily_43页_2mb_2mb

Asia Pacific Daily - 26 May 2014 Summary

Core Content Overview

This document provides a summary of stock research and market analysis from Daiwa and Affin Investment Bank for the Asia Pacific region, with a focus on key financial updates, analyst ratings, and market performance for various companies and indices.

Key Companies and Analyst Ratings

CIMB Group (CIMB MK)

• Sector: Banking
• Analyst: Tan Ei Leen
• Rating: REDUCE (downgrade from ADD)
• Target Price: RM7.05 (↓ from RM7.75)
• Performance: 1Q14 results were sluggish, with core net profit growing 4.4% yoy. Earnings below expectations, leading to a reduction in target price.
• Key Points:
  • Loan growth remained strong, with retail and commercial loans increasing by 12.8% and 20.6% respectively.
  • NIM compression stabilized, and cost management improved.
  • Downgraded due to lower non-interest income and revised earnings forecasts.
  • Key risks include a rebound in capital markets and economic slowdown.

Felda Global Ventures (FGV MK)

• Sector: Plantation
• Analyst: Ong Keng Wee
• Rating: ADD (downgrade from BUY)
• Target Price: RM5.16 (↓ from RM5.66)
• Performance: 1Q14 results were strong but below expectations. Core net profit was RM107.7m, which is below the expected 11.1% of the full year forecast.
• Key Points:
  • Higher CPO prices and inclusion of FHB results boosted PBT.
  • However, core profit was weaker than expected, leading to a cut in forecasts.
  • Downgrade due to lower-than-expected core profit and potential risks from global economic conditions and production issues.

Perdana Petroleum (PETR MK)

• Sector: Oil & Gas
• Analyst: Isaac Chow
• Rating: ADD (upgrade from REDUCE)
• Target Price: RM2.08 (↑ from RM1.67)
• Performance: 1Q14 core net profit surged by 270% yoy to RM20.7m, driven by higher revenue and improved EBITDA margin.
• Key Points:
  • Strong vessel utilisation and new work barges contributed to the earnings growth.
  • Upgraded rating due to improved EPS forecasts and positive outlook on the OSV sector.
  • Key risks include slowdown in domestic O&G activities and potential derating due to Shariah compliance status.

State Bank of India (SBIN IN)

• Sector: Banking
• Analyst: Punit Srivastava
• Rating: Buy (unchanged)
• Target Price: INR3,142 (↑ from INR2,288)
• Performance: 4Q FY14 asset quality improved, with net delinquencies at 0.4% and lower fresh slippages.
• Key Points:
  • NPL recoveries and upgrades drove asset quality improvement.
  • Net profit declined by 8% yoy, but better than consensus.
  • Operating performance improved with stable operating expenses and deposit growth.
  • Raised target price based on improved asset quality and economic recovery expectations.

Regional Indices Performance

Company Roadshows

A list of upcoming company roadshows by Daiwa, covering various companies across Asia, including Bank Negara Indonesia (BBNI IJ), Worley Parsons (WOR AU), 21Vianet (VNET US), and others, scheduled from 22-27 May to 17-18 Jun 2014 in different locations such as US, Tokyo, and HK.

Daiwa Asian Events

Daiwa is hosting several investment conferences and corporate days across different regions, including:

• Daiwa ASEAN Conference - Thailand Corporate Day 2014 (Tokyo, 26-27 May)
• Daiwa Investment Conference New York 2014 (New York, 27-28 May)
• Daiwa Investment Conference San Francisco 2014 (San Francisco, 30 May)
• Daiwa Investment Conference London 2014 (London, 2-3 Jun)
• Daiwa-Bahana Indonesia Corporate Day: Political Beneficiaries (Jakarta, 11 Jun)
• Daiwa Taiwan Growth Focus Corporate Day (Tokyo, 12-13 Jun)
• Daiwa Korea Corporate Day 2014 (Singapore, 16 Jun; HK, 17-18 Jun)

Key Investment Risks and Recommendations

• CIMB Group: Risk of economic slowdown and capital market activity rebound.
• Felda Global Ventures: Global economic recovery, production issues, and valuation risks for new acquisitions.
• Perdana Petroleum: Unexpected slowdown in domestic O&G activities and potential derating due to Shariah compliance status.
• State Bank of India: Economic recovery may not materialise, leading to higher credit costs.

Summary of Analyst Actions

• CIMB Group: Downgraded to REDUCE, target price cut.
• Felda Global Ventures: Downgraded to ADD, target price cut.
• Perdana Petroleum: Upgraded to ADD, target price raised.
• State Bank of India: Target price raised, Buy rating reaffirmed.

Conclusion

The document highlights the mixed performance of financial and industrial companies in the Asia Pacific region. While some companies like Perdana Petroleum showed strong results, others like CIMB Group and Felda Global Ventures faced earnings disappointments. Analysts have adjusted their ratings and target prices accordingly, reflecting cautious outlooks and potential risks. Regional indices showed varied performance, with some indicating positive growth while others experienced declines. Upcoming roadshows and investment conferences are expected to provide further insights into the market dynamics.