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June 10, 2015
ST
RAT
EG
Y R
ESEA
RC
H |
Hong K
ong /
Chin
a
SEE PAGE 20 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
The Strategist
Hong Kong/China-Focus List The HK/China-Focus List represents the most actionable Long and
Short ideas based on our coverage. The list currently has 19 stocks
and the inclination is to keep it tight and focused on our six core
investment themes:
1) Financial reform. The deepening financial reforms will benefit
some China banks, Hong Kong Exchanges and Clearing (388 HK, Not
Rated) and brokers.
2) Long H-shares, Short A-shares. The government is expanding
different channels to increase cross-broader flows. The A-H
premium index has returned to 40% but it will narrow in the long
term. Lists of A-H stocks that are dual-listed in SH-HK and SZ-HK
are in this report.
3) Strong USD. This is the key risk to emerging markets (EM),
especially China. China developers with high USD debts and
funding risks, and companies with high exposure to EM are at risk.
4) Risk of rising bond yields. The recent global bond market
selloff has erased all of this year’s gains. This is negative to some
interest-rate sensitive high-yield stocks, eg, REITs and utilities.
5) Domestic consumption. Staples’ index performance relative to
discretionary is near support levels and has started to turn around.
Valuations and earnings upgrades are more favourable to staples.
6) Alternative energy. Our analyst’s top preference is the solar
downstream sector as it has the highest IRR among the alternative
energy sources, followed by nuclear then wind power.
Strategist Willie Chan
(852) 2268-0631
Hong Kong / China Focus List
Mkt cap 3m T/O Price
TP
Ticker Sector Company USDm USDm (LC) Rating (LC) Upside (%)
Financial reform: 1288 HK Banks Agricultural Bank of China 194,134 113 4.2 Buy 5.1 21
1963 HK Banks Bank of Chongqing 2,673 3 7.6 Buy 9.7 27 939 HK Banks China Construction Bank 251,841 369 7.8 Buy 9.4 20 3360 HK Diversified Financials Far East Horizon 3,172 14 7.6 Buy 12.5 64 Long H-shares, Short A-shares:
2866 HK Transport China Shipping Container Line 13,767 56 4 Buy 6 54 1138 HK Transport China Shipping Development 6,381 22 6 Buy 8 35 2333 HK Automotive Great Wall Motors 22,095 57 51 Buy 63 23 3968 HK Banks China Merchants Bank 83,201 87 25 Sell 21 (15) Strong USD:
992 HK Technology Lenovo Group 17,679 73 12 Sell 9 (28) 2618 HK Technology TCL Communication 1,325 9 8 Hold 8 (2) Risk of rising bond yields:
902 HK Utilities Huaneng Power 25,358 33 11 Hold 9 (10) Domestic consumption:
538 HK Consumer Staples Ajisen (China) 622 1 4.6 Buy 5.6 23 1117 HK Consumer Staples China Modern Dairy 1,924 6 3.1 Buy 3.6 15 1044 HK Consumer Staples Hengan International 14,473 27 90.6 Buy 102.6 13 151 HK Consumer Staples Want Want China 14,589 28 8.6 Buy 10.3 19 1958 HK Consumer Discretionary BAIC Motor 10,324 10 11 Sell 8 (25) 2238 HK Consumer Discretionary GAC 11,147 12 8 Sell 5 (31) Alternative energy:
916 HK Energy China Longyuan Power 9,702 18 9.6 Buy 12.0 25 451 HK Energy GCL New Energy 1,610 9 1.0 Buy 1.6 62 Source: Bloomberg, Maybank Kim Eng Research
June 10, 2015 2
Strategy Research
Hong Kong/China-Focus List
The Hong Kong/China-Focus List represents the most actionable Long and
Short ideas based on our coverage. The list currently has 19 stocks and the
inclination is to keep it tight and focused. The HK/China-Focus List is
positioned within the context of our six core investment themes that we
have discussed: 1) financial reform; 2) long H-shares, Short A-shares; 3)
strong USD; 4) risk of rising bond yields; 5) domestic consumption; and 6)
alternative energy.
Financial reform: China is deepening its financial reforms and the focus is on: 1) RMB
internationalization; 2) capital account liberalization; 3) improving
financial services available to small and micro enterprises; and 4)
improving domestic capital markets and internet finance.
China has taken the following steps:
1) For RMB internationalization. The government continues to work with
more countries on RMB clearance arrangement and currency swap
deals. It has also given foreign companies more freedom to convert
their capital in foreign exchanges to RMB. Right now it targets to have
RMB added to the Special Drawing Rights (SDR) basket in Oct 2015.
2) For capital account liberalization. The government has significantly
liberalized two-way capital flows by unveiling: i) Shanghai-HK and
Shenzhen-HK Stock Connect; ii) China-HK mutual fund recognition; and
iii) QDII programme for domestic individual investors.
3) To improve financial services available to small and micro
enterprises. The government is encouraging banks to improve the
availability of loans and broaden the scope of financial services for
small and micro enterprises.
4) To improve domestic capital markets and internet finance. China is
establishing an IPO registration process to replace the current
administrative approval control process. In addressing local government
debt risk, the municipal bond market was formally launched in Apr-15.
The government is also allowing private capital to invest in public
projects through the private and public partnership (PPP) model.
Municipal bond issuances and PPP-based financing via corporate bond
issuances will really help to expand the size of China’s bond market.
The development of internet financing will also increase the size of the
P2P market.
We believe the financial sector will benefit from the reforms. Under the
debt-swap programme, the interest burden on local governments will
be lower and banks’ NPL problem will be eased as well. The whole yield
curve could also steepen as this may result in lower short-dated bond
yields.
YTD, China banks have still underperformed slightly relative to the MSCI
China. Valuation-wise, it is trading at 1.1x 2015 P/BV with 4.6%
dividend yield. We believe the potential upside for banks is relatively
higher than for other expensive sectors such as tech and small-cap.
June 10, 2015 3
Strategy Research
Figure 1: MSCI China Banks relative to MSCI China, P/BV
Source: MSCI, Factset, Maybank Kim Eng Research
Steven Chan, our regional banks analyst, has BUY ratings on China
Construction Bank, Agricultural Bank of China, Bank of Chongqing and Far
East Horizon.
China Construction Bank has the strongest capital position among peers. Its
CET1 CAR was 12.5% in Mar 2015. The bank also benefits from RMB
clearance arrangement given its extensive overseas networks.
As for Agricultural Bank of China and Bank of Chongqing, they both benefit
from the government’s policy to support the agricultural sector and to
broaden the scope of financial services for small and micro enterprises.
Agricultural Bank of China recorded a recovery in fee income, stronger
loan growth (4.9% QoQ) and improvement in asset quality in its 1Q15
results. It also offers 5.1% dividend yield. In addition, Bank of Chongqing
has the highest ROE and is rapidly diversifying its fee income business.
Furthermore it has better-than-sector average asset quality. It also
recorded higher loan growth of 4.5% QoQ in Mar 2015.
Catalysts for Far East Horizon are its upcoming earnings growth drivers: 1)
operating lease of expensive industrial and infrastructure equipment; and
2) healthcare services through the acquisition of specialty hospitals. It’s
trading at 5.5x 2016F PER, well below the average for its regional peers of
11x.
Since Nov-14, the Chinese government has launched many different
policies to increase the two-way capital flows between the China and Hong
Kong markets. However, it will still take more time to see greater money
flows from the mainland to Hong Kong. That said, overseas investors have
already increased their participation in the Hong Kong market as the daily
turnover has already doubled compared to last year. Obviously it is very
positive for HK Exchanges and Clearing (388 HK, Not Rated) and brokerage
stocks given their share prices are highly sensitive to the market turnover.
In addition, many HK-listed Chinese brokerage stocks are trading at a
discount to their A-share peers, eg GF Securities, Haitong Securities and
Citic Securities. (Please refer to Long H-shares, Short A-shares section.)
June 10, 2015 4
Strategy Research
Figure 2: Hong Kong Exchanges & Clearing (388 HK, NR) and market turnover
Source: CEIC, Bloomberg, Maybank Kim Eng Research
Long H-shares, Short A-shares: Since the Shanghai-HK Stock Connect was launched in Nov-14, the flows via
this programme have been disappointing so far. As of 3 Jun, only 51.5% of
the northbound aggregate quota and 39.4% of the southbound aggregate
quota had been utilized. This is the main reason why the Hang Seng A-H
premium index is now back to 40%. Given the Chinese government is
expanding different channels to increase cross-broader flows, we believe
the A-H gap will narrow in the long term. The market is expecting the
Shenzhen-HK Stock Connect to be launched in 4Q15. Although we do not
think the potential flows will be better than Shanghai-HK Stock Connect,
market speculation is likely again.
Below is a list of companies dual-listed in Shenzhen and Hong Kong. Most
of the H-shares are trading at a significant discount to their A-share peers.
Figure 4: Shenzhen-Hong Kong dual-listed companies, premium/discount
H-shr price A-shr price Premium/ Rating
H-share A-share Company Sector HKD CNY discount (%) on H-shr
1057 HK 002703 CH Zhejiang Shibao* Consumer Discretionary 16 52 -76 Not Rated
568 HK 002490 CH Shandong Molong Petroleum Mach Energy 5 16 -72 Not Rated
42 HK 000585 CH Northeast Electric Development Industrials 3 8 -68 Not Rated
350 HK 000666 CH Jingwei Textile Machinery Industrials 12 27 -63 Not Rated
719 HK 000756 CH Shandong Xinhua Pharmaceutical Health Care 8 18 -62 Not Rated
921 HK 000921 CH Hisense Kelon Electrical Consumer Discretionary 7 14 -58 Not Rated
1812 HK 000488 CH Shandong Chenming Paper Materials 6 12 -58 Not Rated
895 HK 002672 CH Dongjiang Environmental Industrials 48 76 -49 Not Rated
1157 HK 000157 CH Zoomlion Heavy Industry Science Industrials 7 10 -46 Not Rated
1211 HK 002594 CH BYD Consumer Discretionary 55 75 -42 Not Rated
763 HK 000063 CH ZTE Information Technology 24 32 -42 Not Rated
1513 HK 000513 CH Livzon Pharmaceutical Group Health Care 66 91 -42 Not Rated
2208 HK 002202 CH Xinjiang Goldwind Science & Tech Industrials 20 25 -37 Not Rated
2039 HK 000039 CH China International Marine Containers Industrials 23 29 -36 Not Rated
2338 HK 000338 CH Weichai Power Industrials 30 35 -33 Not Rated
347 HK 000898 CH Angang Steel Materials 6 8 -33 Sell
1776 HK 000776 CH GF Securities Financials 25 27 -26 Not Rated
2202 HK 000002 CH China Vanke Financials 20 15 9 Not Rated
Source: Bloomberg, Maybank Kim Eng Research *suspended in A-share market
Figure 3: Hang Seng A-H premium
Source: Bloomberg, Maybank Kim Eng Research
80
130
180
230
06 07 08 09 10 11 12 13 14 15
Hang Seng A-H premium
June 10, 2015 5
Strategy Research
As for stocks that are dual-listed in Shanghai and Hong Kong, our analysts
have BUY recommendations based on fundamentals for the following H-
shares: China Shipping Container Lines, China Shipping Development, Great
Wall Motors and Agricultural Bank of China. However, our analyst has a
SELL recommendation on China Merchants Bank.
China Shipping Container Lines and China Shipping Development. Osbert
Tang, our transportation analyst, believes China Shipping Container Lines is
a potential industry restructuring candidate though the process will be a
lengthy one. Valuation-wise it is also more attractive than its A-shares. For
China Shipping Development, he believes the key earnings drivers for the
next two years are higher VLCC profitability, pick-up in domestic coal
freight rate, contribution from LNG transportation and lower fuel
expenses.
Great Wall Motors. KL Lo, our consumer discretionary analyst, believes
sales will be driven by new models and favourable YoY sales comparison in
the coming quarters will also benefit the company. Gross margins will
further improve given better product mix and higher utilization at the new
Xushui plant.
China Merchants Bank. Steven Chan is concerned about the bank’s
weakening asset quality, rising credit costs and declining non-interest
income. The bank’s loan growth also slowed down in 1Q.
Figure 5: Shanghai-Hong Kong dual-listed companies, premium/discount
H-shr price A-shr price Premium/ Rating
H-share A-share Name Sector HKD CNY discount (%) on H-shr
1108 HK 600876 CH Luoyang Glass Industrials 7 20 -72 Not Rated
2727 HK 601727 CH Shanghai Electric Group Industrials 8 23 -71 Not Rated
2866 HK 601866 CH China Shipping Container Lines Industrials 4 10 -71 Buy
553 HK 600775 CH Nanjing Panda Electronics L Information Technology 11 27 -68 Not Rated
38 HK 601038 CH First Tractor Industrials 7 18 -68 Not Rated
300 HK 600806 CH Shenji Group Kunming Machine T* Industrials 4 9 -68 Not Rated
187 HK 600860 CH Beijing Jingcheng Machinery El Industrials 6 15 -67 Not Rated
1033 HK 600871 CH Sinopec Oilfield Service Materials 4 10 -67 Not Rated
2880 HK 601880 CH Dalian Port PDA Industrials 4 10 -67 Not Rated
1919 HK 601919 CH China COSCO Holdings Industrials 6 14 -66 Sell
338 HK 600688 CH Sinopec Shanghai Petrochemical Materials 4 9 -66 Not Rated
1618 HK 601618 CH Metallurgical Corp of China Industrials 4 10 -66 Not Rated
3993 HK 603993 CH China Molybdenum Materials 7 17 -66 Not Rated
1053 HK 601005 CH Chongqing Iron & Steel Materials 2 6 -66 Not Rated
107 HK 601107 CH Sichuan Expressway Industrials 4 9 -65 Not Rated
1171 HK 600188 CH Yanzhou Coal Mining Energy 7 16 -64 Sell
323 HK 600808 CH Maanshan Iron & Steel Materials 3 7 -63 Sell
1065 HK 600874 CH Tianjin Capital Environmental Industrials 8 17 -63 Not Rated
564 HK 601717 CH Zhengzhou Coal Mining Machiner Industrials 7 14 -63 Not Rated
2899 HK 601899 CH Zijin Mining Group Materials 3 7 -61 Not Rated
2600 HK 601600 CH Aluminum Corp of China Materials 5 9 -61 Sell
588 HK 601588 CH Beijing North Star Financials 4 8 -60 Not Rated
1138 HK 600026 CH China Shipping Development Industrials 6 12 -60 Buy
1766 HK 601766 CH CRRC Corp* Industrials 15 29 -59 Not Rated
995 HK 600012 CH Anhui Expressway Industrials 8 16 -59 Not Rated
390 HK 601390 CH China Railway Group Industrials 10 19 -58 Not Rated
317 HK 600685 CH CSSC Offshore and Marine Engin Industrials 36 68 -58 Not Rated
2883 HK 601808 CH China Oilfield Services Energy 15 27 -58 Not Rated
991 HK 601991 CH Datang International Power Gen Utilities 5 9 -57 Hold
1898 HK 601898 CH China Coal Energy Energy 5 9 -56 Sell
358 HK 600362 CH Jiangxi Copper Materials 15 26 -53 Hold
June 10, 2015 6
Strategy Research
1072 HK 600875 CH Dongfang Electric Industrials 18 29 -51 Not Rated
2238 HK 601238 CH Guangzhou Automobile Group Consumer Discretionary 8 13 -51 Sell
670 HK 600115 CH China Eastern Airlines Industrials 6 10 -50 Not Rated
525 HK 601333 CH Guangshen Railway Industrials 5 8 -49 Not Rated
548 HK 600548 CH Shenzhen Expressway Industrials 7 11 -49 Not Rated
1186 HK 601186 CH China Railway Construction Industrials 14 22 -49 Not Rated
2009 HK 601992 CH BBMG Materials 9 13 -45 Not Rated
874 HK 600332 CH Guangzhou Baiyunshan Pharmaceu Health Care 32 45 -43 Not Rated
1800 HK 601800 CH China Communications Construct Industrials 14 19 -43 Not Rated
1055 HK 600029 CH China Southern Airlines Industrials 8 10 -41 Not Rated
857 HK 601857 CH PetroChina Energy 9 12 -41 Sell
3948 HK 900948 CH Inner Mongolia Yitai Coal Energy 9 2 -40 Not Rated
753 HK 601111 CH Air China Industrials 9 12 -37 Not Rated
1336 HK 601336 CH New China Life Insurance Financials 50 61 -35 Not Rated
998 HK 601998 CH China CITIC Bank Financials 7 8 -32 Hold
1088 HK 601088 CH China Shenhua Energy Energy 20 23 -30 Sell
2196 HK 600196 CH Shanghai Fosun Pharmaceutical Health Care 33 37 -29 Not Rated
6818 HK 601818 CH China Everbright Bank Financials 5 6 -29 Not Rated
2607 HK 601607 CH Shanghai Pharmaceuticals Health Care 26 29 -29 Not Rated
902 HK 600011 CH Huaneng Power International In Utilities 11 12 -28 Hold
6837 HK 600837 CH Haitong Securities Financials 24 27 -28 Not Rated
386 HK 600028 CH China Petroleum & Chemical Energy 7 8 -27 Hold
168 HK 600600 CH Tsingtao Brewery Consumer Staples 52 57 -27 Not Rated
1071 HK 600027 CH Huadian Power International Utilities 9 9 -20 Hold
6030 HK 600030 CH CITIC Securities Financials 32 32 -20 Not Rated
3328 HK 601328 CH Bank of Communications Financials 8 7 -19 Hold
1988 HK 600016 CH China Minsheng Banking Financials 11 11 -19 Sell
2628 HK 601628 CH China Life Insurance Financials 37 36 -18 Not Rated
2333 HK 601633 CH Great Wall Motors Consumer Discretionary 52 47 -12 Buy
1288 HK 601288 CH Agricultural Bank of China Financials 4 4 -10 Buy
939 HK 601939 CH China Construction Bank Financials 8 7 -7 Buy
3988 HK 601988 CH Bank of China Financials 5 4 -7 Hold
177 HK 600377 CH Jiangsu Expressway Industrials 11 9 -6 Not Rated
2601 HK 601601 CH China Pacific Insurance Group Financials 41 33 -2 Not Rated
914 HK 600585 CH Anhui Conch Cement Materials 33 26 0 Not Rated
3968 HK 600036 CH China Merchants Bank Financials 25 19 4 Sell
1398 HK 601398 CH Industrial & Commercial Bank Financials 7 5 4 Hold
2318 HK 601318 CH Ping An Insurance Group Financials 115 86 6 Not Rated
Source: Bloomberg, Maybank Kim Eng Research *suspended in A-share market
Strong USD: A strong USD is still the key risk to emerging markets, especially for China.
As mentioned in our first report (Must… Fix… This…, 5 Dec 2014), many
Chinese companies raised a lot of offshore bonds due to expectations of
RMB depreciation, cheaper overseas funding costs and the difficulty of
securing financing inside China. The following chart shows the strong USD
has already attracted capital away from China since the beginning of 2014.
June 10, 2015 7
Strategy Research
Figure 6: MSCI China consumer staples relative MSCI China, index performance
Source: Bloomberg, Maybank Kim Eng Research
China property is a sector that has borrowed heavily in the past few years.
Many developers have high net debt/equity multiples. This is why many of
them have done placements recently to rebuild their balance sheets.
Interest rate cuts and small sales pick-up in tier-1 cities do help relieve
some of their financial pressure. However, sluggish sales in tier-2 and tier-
3 cities and high housing inventory remain the major issues for them.
The latest earnings of Lenovo and TCL Communication show the strength of
the USD has started to hurt companies with high exposure to EMs.
Approximately 55-60% of Lenovo’s sales come from EMs/EU/JP. Lenovo’s
1Q15 revenue missed guidance and consensus forecast by 6-7% because of
the strong USD. For TCL Communication, 75-80% of sales are from EMs.
Companies with high exposure to EMs could be the most at risk.
Warren Lau, our technology analyst, has a SELL on Lenovo and HOLD on
TCL Communication. Also, IDC lowered their outlook for PCs and global
smartphones demand. Warren has low expectations for Lenovo to turn
around Moto’s smartphone and IBM’s X-system server business it acquired
in late 2014. He thinks even if the company can lower costs, end-market
demand, competition, pricing and market share are bigger challenges for
Lenovo.
For TCL Communication, Warren believes weaker-than-end-market
demand, a stronger USD, and to a lesser extent increasing competition, are
the key reasons he thinks the Street’s earnings forecast may be too
optimistic.
Risk of rising bond yields: The recent global bond market sell-off has already erased all of this year’s
gains. The poor bond market liquidity, extremely low bond yields
environment in the past few years and a slight improvement of the
economic outlook for Europe have triggered this sharp unwinding. Based on
mean-revision, there is still room for global bond yields to rise further from
the current low levels. There’s a good chance the Fed increases interest
rates in the next six months. This is negative to some interest-rate
sensitive high-yield stocks, eg, REITs and utilities.
6.0
6.2
6.4
6.6
6.8
7.0
7.2
7.4
7.6
7.8
8.0-400
-300
-200
-100
0
100
200
300
400
500
Jan-06 Jan-08 Jan-10 Jan-12 Jan-14
Rmb $bn China estimated captial flow (US$bn), 12-mth rolling
CNY 12-mth forward (RHS)
June 10, 2015 8
Strategy Research
Figure 7: 2-yr bond yield in the US, Germany & HK Figure 8: 10-year bond yield in the US, Germany & HK
Source: Bloomberg, Maybank Kim Eng Research Source: Bloomberg, Maybank Kim Eng Research
The following charts show the inverse correlation between the US 10-year
bond yield and the Hang Seng Utilities index; and the US 10-year bond
yield and the Hang Seng REIT index. Whenever the US 10-year bond yield
moves up, the utilities sector underperforms the Hang Seng Index.
For the REIT sector, the REIT index outperformed the Hang Seng Index
since the US started QE in 2008. In addition, Hong Kong retail sales
enjoyed very strong growth over the past six years, so most of the malls
under the REITs had very strong pricing power on rental. However after
2013, whenever the FED delivered the tightening message, the US 10-year
bond yield has picked up, and the Hang Seng REIT index has
underperformed the market. Singapore REITs have also experienced a
similar change. Also, Hong Kong’s retail sales have slowed down sharply
since 2014, so rental yields might come under pressure as well.
Figure 9: 2-yr bond yield in US, Germany & HK Figure 10: 10-year bond yield in US, Germany & HK
Source: Bloomberg, Maybank Kim Eng Research Source: Bloomberg, Maybank Kim Eng Research
The following is the top 30 high-yield stocks based on our coverage. Within
utilities, we have a HOLD rating on Huaneng Power and it has 10%
downside relative to our target price. Our analyst, Ricky Ng, thinks a new
round of tariff cut (~5.1%) this year could offset the positive impact of
cheaper coal cost. The stock lacks near-term catalysts as the asset
injection from its parent was just recently completed.
(1)
0
1
2
3
4
5
6
07 08 09 10 11 12 13 14 15
% US 2-yr bond Germany 2-yr bond
0
1
2
3
4
5
6
07 08 09 10 11 12 13 14 15
% US 10-yr bond Germany 10-yr bond HK 10-yr bond
0.5
1.0
1.5
2.0
2.5
3.0
0
2
4
6
8
10
92 94 96 98 00 02 04 06 08 10 12 14
% US 10-yr yield HS utility rel Hang Seng Index (RHS)
0.1
0.2
0.3
0.4
1
2
3
4
5
6
05 06 07 08 09 10 11 12 13 14 15
% US 10-yr yieldHS REIT rel Hang Seng Index (RHS)FTSE Strait REIT rel FTSE STI (RHS)
June 10, 2015 9
Strategy Research
Figure 11: The top 30 high-yield stocks under our universe
Mkt Cap
3mth
T/O Price
TP
Up/
down
PER
(x)
P/BV
(x)
Div yield
(%)
EPS
growth (%)
ROE
(%)
Ticker Sector Company (USDm) (USDm) (LC) Rating (LC) -side 15E 16E 15E 16E 15E 16E 15E 16E 15E 16E
321 HK Consumer
Disc.
Texwinca 1,392 2 7.8 Buy 8.7 12 12.4 10.8 1.8 1.7 8 9 5 15 14 16
303 HK Industrials VTECH Holdings 3,285 5 101.5 Hold 112.0 10 16.6 15.7 5.7 5.7 6 6 (3) 6 34 36
600104 CH Automotive SAIC Motor Corp 44,522 333 25.1 Buy 31.4 25 8.4 7.6 1.6 1.4 6 7 18 10 20 20
2888 HK Banks Standard Chartered 40,978 33 122.2 Hold 124.0 1 11.1 9.5 0.8 0.8 6 7 39 17 7 8
5 HK Banks HSBC 186,881 245 73.9 Hold 72.5 (2) 13.1 12.7 0.9 0.9 5 6 6 3 7 7
3698 HK Banks Huishang Bank 5,829 3 4.0 Hold 3.7 (7) 5.9 5.0 0.9 0.8 5 6 7 18 16 17
1288 HK Banks Agricultural Bank of
China
199,214 112 4.2 Buy 5.1 21 5.8 5.2 1.0 0.9 5 6 5 13 18 18
991 HK Utilities Datang Intl Power 15,641 12 4.6 Hold 4.5 (1) 8.9 7.9 1.0 0.9 5 6 30 12 12 12
902 HK Utilities Huaneng Power Intl 25,358 33 10.5 Hold 9.5 (10) 10.1 10.0 1.5 1.4 5 5 9 1 16 14
1373 HK Consumer
Disc.
Intl Housewares Retail 201 0 2.2 Buy 2.7 26 11.3 10.0 1.9 1.7 5 5 8 12 17 18
3360 HK Diversified
Financials
Far East Horizon 3,112 14 7.5 Buy 12.5 67 6.7 5.1 1.1 0.9 5 6 29 32 17 20
2618 HK Technology TCL Communication 1,325 9 8.2 Hold 8.0 (2) 7.5 7.1 3.1 2.9 5 5 12 5 44 38
939 HK Banks China Construction Bank 256,219 369 7.8 Buy 9.4 20 6.5 5.6 1.1 1.0 5 5 5 15 18 18
538 HK Consumer
Staples
Ajisen (China) 633 1 4.4 Buy 5.6 27 15.7 12.0 1.4 1.3 4 6 12 31 9 11
1958 HK Automotive BAIC Motor 10,324 10 10.6 Sell 7.9 (25) 11.3 9.5 1.8 1.6 4 5 7 18 16 18
998 HK Banks China CITIC Bank 54,623 71 6.6 Hold 6.8 4 6.1 5.0 0.8 0.7 4 5 (2) 22 14 15
1963 HK Banks Bank of Chongqing 2,763 3 7.7 Buy 9.7 27 5.2 4.3 0.9 0.8 4 5 13 20 19 19
3618 HK Banks Chongqing Rural
Commercial Bank
7,760 12 6.4 Buy 8.3 29 5.8 4.7 1.0 0.9 4 5 22 21 19 20
1398 HK Banks ICBC 307,292 286 6.7 Hold 6.6 (2) 7.0 6.3 1.1 1.0 4 5 (1) 11 17 17
1259 HK Consumer
Staples
China Child Care
Corporation
215 1 1.6 Hold 2.0 23 4.7 4.5 0.7 0.7 4 4 5 4 17 15
3988 HK Banks Bank of China 215,842 261 5.2 Hold 5.6 8 7.1 6.3 1.0 0.9 4 5 (0) 12 15 15
1071 HK Utilities Huadian Power
International
12,157 12 8.8 Hold 8.8 0 8.9 7.7 1.4 1.2 4 5 6 15 18 16
11 HK Banks Hang Seng Bank 38,292 28 155.8 Hold 142.9 (8) 17.7 15.8 1.9 1.9 4 4 2 12 12 12
1190 HK Construction Bolina Holding 363 1 2.8 Sell 2.4 (17) 10.7 9.4 1.9 1.7 4 4 16 14 19 19
836 HK Utilities China Resources Power 13,896 21 22.3 Buy 25.0 12 8.7 7.8 1.2 1.1 4 4 3 11 15 15
6 HK Utilities Power Assets Holdings 20,341 28 73.5 Buy 87.0 18 17.6 17.1 1.2 1.2 4 4 9 3 7 7
1928 HK Macau Gaming Sands China 31,426 81 28.5 Hold 28.2 (1) 22.0 21.9 4.4 4.3 4 4 (48) 0 21 20
811 HK Industrials Xinhua Winshare
Publishing and Media
1,561 2 10.4 Buy 11.0 6 13.2 11.6 1.5 1.4 4 4 13 14 12 13
2380 HK Utilities China Power Intl
Development
5,876 22 6.3 Buy 4.6 (26) 11.6 10.8 1.4 1.2 3 4 3 7 12 12
3328 HK Banks Bank of Communications 87,839 44 7.6 Hold 7.5 (2) 7.9 7.1 0.9 0.8 3 4 (13) 11 12 12
Source: Bloomberg, Maybank Kim Eng Research
June 10, 2015 10
Strategy Research
Domestic consumption: YTD, consumer staples is the biggest underperforming sector within MSCI
China. Either relative to MSCI China or consumer discretionary,
performance of the consumer staples index is near the support level and
could start to turn around. Both valuations and earnings upgrades are also
more favourable for staples. Hence we favour consumer staples more than
consumer discretionary. (Long staples, Short discretionary, May 21, 2015.)
The Apr-15 auto sales data show China’s auto market has entered the slow
season (Apr-Sep). The following chart shows the P/BV for auto relative to
food, beverage & tobacco has hit the top-end of the range and auto has
also outperformed food, beverage & tobacco by 43% YoY. Therefore, we
believe weak retail sales and weak top-line growth for the consumer
staples sector should have already been priced in.
Figure 12: Staples rel discretionary, PB Figure 13: Auto rel food, beverage & tobacco, relative PB
Source: CEC, NBS, Maybank Kim Eng Source: NDRC, Maybank Kim Eng
Our consumer staples analysts Jacqueline Ko and Benjamin Ho favour China
Modern Dairy, Want Want, Hengan and Ajisen. They think falling raw
material costs will continue to improve Want Want China’s profit margin
while product-mix upgrade will continue to increase its ASP. Within the
dairy sector, they favour upstream over downstream. Benjamin expects
the price of domestic raw milk will increase in 2H15 and companies that
produce quality raw milk will increase in 2H15 and that they should be
rewarded as they have the flexibility of moving into value-added
categories such as branded pasteurized milk. The key catalysts for China
Modern Dairy are recovering raw milk price in 2H15 HoH, on-track raw milk
volume output and normalizing downstream ex-factory ASP.
Our consumer discretionary analyst KL Lo has SELL ratings on GAC Group
and BAIC Group. He expects Japanese brands will face stiffer pricing
pressure in the coming quarters and GAC is trading at a much higher PER
than its peer Dongfeng (China Auto OEM, 18 May 2015). For BAIC Group, he
thinks Beijing Hyundai is a strong cash generator for the company and
Benz’s operation and earnings are poised to improve on the back of rising
scale, but the company’s proprietary brand strategy remains a drag. He
believes the company will continue to be loss-making in 2015-17E on rising
investment and additional R&D expenses, which will offset the benefits
from scale and cost reduction.
June 10, 2015 11
Strategy Research
Alternative energy: Air pollution is a severe problem in China and poses a threat to China’s
public health. Currently, the density of PM 2.5 in Beijing is the highest
among the various Asian cities. The Chinese government published the plan
to tackle air pollution. Its goal is to reduce coal consumption by closing
polluting mills and factories, and switching to alternative energy sources
such as hydro, nuclear and renewable energy. The government has also
announced many favourable policies to create domestic demand.
Within the alternative energy space, Ricky Ng, our utilities analyst, prefers
the China solar downstream sector. It offers the highest IRR within the
energy sector in China, followed by nuclear and then wind power. The
government aims to have 100GW of solar capacity and 200GW of wind by
2020. (Solar farms – a sunrise industry, May 13, 2015.)
Figure 15: China’s power generation in 2014 Figure 16: China’s power capacity target in 2020
Source: CEC, NBS, Maybank Kim Eng Source: NDRC, Maybank Kim Eng
Ricky has BUYs on GCL New Energy and Longyuan Power. Ricky forecasts
robust installation capacity growth for GCL New Energy. He expects
possible synergies between GCL New Energy and its parent, GCL-Poly, on
cost saving and by leveraging the latter’s brand and reputation. GCL New
Energy could be the first to carry out the “Yield Co” business model in
China to further boost capacity. GCL New Energy could spin off the entity
holding operating solar power projects to create another financing channel
to secure cheaper funds to acquire the newly constructed solar projects.
Longyuan Power’s 1Q15 earnings beat expectations due to stronger wind
and coal-fired power generation as well as falling finance expenses. Ricky
is optimistic about Longyuan’s capacity growth as the upcoming fifth batch
of wind project pre-approvals in China will contribute to a sustainable
project pipeline. The total capacity approvals in the fifth batch could be
more than the average of 28GW in the last four batches.
Thermal 75.6%
Hydro 19.0%
Nuclear 2.4%
Wind 2.4%
Solar 0.5%
Coal 60% Hydro
18%
Nuclear 3%
Natural Gas 4%
Wind 10%
Solar 5%
Figure 14: IRR among different power sources
Source: Bloomberg, Maybank Kim Eng Research
6%
8%
10%
12%
14%
16%
18%
20%
Solar Nuclear Wind Coal Hydro
June 10, 2015 12
Strategy Research
Figure 17: Hong Kong/China-Focus List
Mkt Cap
3m
T/O Price
TP
Up/
down PER (x) P/BV (x)
Div yield
(%)
EPS
growth (%) ROE (%)
Ticker Sector Company USDm USDm (LC) Rating (LC) side(%) 15E 16E 15E 16E 15E 16E 15E 16E 15E 16E
Financial Reform
1288 HK Banks Agricultural Bank of China 194,134 113 4.2 Buy 5.1 21 5.8 5.2 1.0 0.9 5.1 5.7 5 13 18 18
1963 HK Banks Bank of Chongqing 2,673 3 7.6 Buy 9.7 27 5.2 4.3 0.9 0.8 4.3 5.2 13 20 19 19
939 HK Banks China Construction Bank 251,841 369 7.8 Buy 9.4 20 6.5 5.6 1.1 1.0 4.6 5.3 5 15 18 18
3360 HK Div. Financials Far East Horizon 3,172 14 7.6 Buy 12.5 64 6.7 5.1 1.1 0.9 4.7 5.9 29 32 17 20
Long H-shares, Short A-shares
2866 HK Transport China Shipping Container
Lines
13,767 56 4 Buy 6 54 22.1 15.2 1.3 1.2 0.0 1.0 1,315 45 6 8
1138 HK Transport China Shipping
Development
6,381 22 6 Buy 8 35 23.4 17.0 0.7 0.7 2.3 2.5 922 38 3 4
2333 HK Automotive Great Wall Motors 22,095 57 51 Buy 63 23 10.7 9.1 3.0 2.4 2.8 3.3 44 18 31 30
3968 HK Banks China Merchants Bank 83,201 87 25 Sell 21 (15) 7.9 6.3 1.4 1.2 3.4 4.3 13 26 19 21
Strong USD
992 HK Technology Lenovo Group 17,679 73 12 Sell 9 (28) 19.8 20.1 3.4 3.0 2.0 2.9 2 (1) 21 16
2618 HK Technology TCL Communication 1,325 9 8 Hold 8 (2) 7.5 7.1 3.1 2.9 4.6 4.5 12 5 44 38
Risk on rising bond yield
902 HK Utilities Huaneng Power 25,358 33 11 Hold 9 (10) 10.1 10.0 1.5 1.4 5.1 5.1 9 1 16 14
Domestic Consumption
538 HK Consumer
Staples
Ajisen (China) 622 1 4.6 Buy 5.6 23 15.7 12.0 1.4 1.3 4.5 5.8 12 31 9 11
1117 HK Consumer
Staples
China Modern Dairy 1,924 6 3.1 Buy 3.6 15 9.4 7.8 1.7 1.4 0.8 1.1 52 21 19 20
1044 HK Consumer
Staples
Hengan Intl 14,473 27 90.6 Buy 102.6 13 24.1 21.2 5.7 5.1 2.6 3.0 19 14 25 26
151 HK Consumer
Staples
Want Want China 14,589 28 8.6 Buy 10.3 19 19.3 18.0 5.9 5.1 2.6 2.8 22 7 34 31
1958 HK Consumer
Discretionary
BAIC Motor 10,324 10 11 Sell 8 (25) 11.3 9.5 1.8 1.6 4.4 5 7 18 16 18
2238 HK Consumer
Discretionary
GAC 11,147 12 8 Sell 5 (31) 10.9 9.2 1.1 1.0 3.0 4 16 18 10 11
Alternative Energy
916 HK Energy Longyuan Power 9,702 18 9.6 Buy 12.0 25 13.9 12.3 1.6 1.4 1.4 1.5 69 13 12 12
451 HK Energy GCL New Energy 1,610 9 1.0 Buy 1.6 62 22.3 10.0 3.6 2.6 0.0 0.0 -527 124 18 31
Source: Bloomberg, Maybank Kim Eng
June 10, 2015 13
Strategy Research
Performance and valuation summary
Figure 18: Equity performance by country (in local currency terms)
Index level
FX rate
--- Absolute performance (local currency) ---
Name -1w -1m -3m -6m -1y MTD QTD YTD
MSCI All Country World 427
(2) (2) (1) 1 1 (2) 1 2
MSCI Emerging Market 977
(3) (7) 0 (1) (6) (3) 0 2
MSCI Asia Pac (inc JP) 147
(3) (4) 2 5 3 (3) 1 7
MSCI Asia Pac x JP 483
(3) (6) (0) 2 (1) (3) (1) 3
MSCI Asia x JP 598
(3) (5) 3 4 4 (3) 1 6
MSCI Far East x JP 567
(2) (5) 4 6 5 (2) 2 7
MSCI Emerging Asia 485
(3) (5) 2 4 4 (3) 1 6
MSCI EM Latin America 2,493
(0) (9) (1) (13) (23) (0) 2 (9)
MSCI EMMEA 265
(4) (11) (5) (8) (21) (4) (3) (2)
MSCI Frontie 586 1 (3) (3) (7) (16) 1 0 (4)
MSCI Asia x JP Small Cap 1,151
(3) (1) 9 11 7 (3) 7 13
China - Shanghai Composite 5,132 6.2 11 19 58 75 151 11 37 59
China - H-shares 14,114 7.8 0 0 22 22 36 0 14 18
Hong Kong - HSI 27,316 7.8 (0) (2) 13 14 18 (0) 10 16
Taiwan - TAIEX 9,368 31.1 (3) (5) (2) 2 2 (3) (2) 1
Korea - KOSPI 2,065 1,123 (2) (3) 3 4 3 (2) 1 8
Singapore - STI 3,320 1.4 (2) (4) (2) (0) 1 (2) (4) (1)
Malaysia - KLCI 1,739 3.8 (0) (5) (4) (1) (7) (0) (5) (1)
Thailand - SET 1,508 33.8 1 (1) (3) (6) 4 1 0 1
Indonesia - JCI 5,015 13,380 (4) (3) (8) (3) 2 (4) (9) (4)
Philippines - PSEi 7,485 45.0 (1) (5) (4) 4 11 (1) (6) 4
India - Sensex 26,523 64.1 (5) (3) (10) (7) 6 (5) (5) (4)
Vietnam - Ho Chi Minh 580 21,815 2 5 (3) 0 5 2 5 6
Australia ASX 200 5,499 1.3 (5) (6) (7) 3 1 (5) (7) 2
New Zealand - NZX50 5,886 1.4 1 2 0 7 14 1 1 6
Japan - Nikkei 225 20,457 125.3 (1) 5 9 14 36 (1) 7 17
Japan - TOPIX 1,662 125.3 (1) 5 9 15 35 (1) 8 18
S&P 500 2,079 1.0 (1) (0) (1) 0 7 (1) 1 1
Russell 2000 1,254 1.0 1 3 2 6 9 1 0 4
FTSE 100 6,790 1.5 (3) (2) (2) 1 (0) (3) 0 3
Euro Stoxx 3,468 1.1 (3) (2) (4) 6 6 (3) (6) 10
Source: Maybank Kim Eng, Factset, MSCI, data as of 8 June 2015
June 10, 2015 14
Strategy Research
Figure 19: Equity performance by country (in USD terms)
Index level
FX rate
--- Absolute performance (USD) ---
Name -1w -1m -3m -6m -1y MTD QTD YTD
MSCI All Country World 427
(2) (2) (1) 1 1 (2) 1 2
MSCI Emerging Market 977
(3) (7) 0 (1) (6) (3) 0 2
MSCI Asia Pac (inc JP) 147
(3) (4) 2 5 3 (3) 1 7
MSCI Asia Pac x JP 483
(3) (6) (0) 2 (1) (3) (1) 3
MSCI Asia x JP 598
(3) (5) 3 4 4 (3) 1 6
MSCI Far East x JP 567
(2) (5) 4 6 5 (2) 2 7
MSCI Emerging Asia 485
(3) (5) 2 4 4 (3) 1 6
MSCI EM Latin America 2,493
(0) (9) (1) (13) (23) (0) 2 (9)
MSCI EMMEA 265
(4) (11) (5) (8) (21) (4) (3) (2)
MSCI Frontie 586 1 (3) (3) (7) (16) 1 0 (4)
MSCI Asia x JP Small Cap 1,151
(3) (1) 9 11 7 (3) 7 13
China - Shanghai Composite 5,132 6.2 11 19 60 73 153 11 37 59
China - H-shares 14,114 7.8 0 0 22 22 36 0 14 18
Hong Kong - HSI 27,316 7.8 (0) (2) 13 14 18 (0) 10 16
Taiwan - TAIEX 9,368 31.1 (5) (6) (1) 2 (1) (5) (2) 2
Korea - KOSPI 2,065 1,123 (4) (7) 1 3 (6) (4) (0) 5
Singapore - STI 3,320 1.4 (3) (6) (2) (3) (7) (3) (3) (4)
Malaysia - KLCI 1,739 3.8 (3) (9) (7) (8) (20) (3) (7) (8)
Thailand - SET 1,508 33.8 0 (4) (7) (8) 0 0 (4) (2)
Indonesia - JCI 5,015 13,380 (5) (5) (11) (11) (10) (5) (11) (11)
Philippines - PSEi 7,485 45.0 (2) (6) (6) 2 8 (2) (6) 3
India - Sensex 26,523 64.1 (5) (4) (13) (10) (2) (5) (7) (5)
Vietnam - Ho Chi Minh 580 21,815 2 4 (5) (2) 2 2 4 4
Australia ASX 200 5,499 1.3 (5) (9) (9) (6) (17) (5) (7) (5)
New Zealand - NZX50 5,886 1.4 0 (5) (5) (2) (5) 0 (5) (4)
Japan - Nikkei 225 20,457 125.3 (2) 0 5 11 11 (2) 2 12
Japan - TOPIX 1,662 125.3 (2) 0 5 11 10 (2) 3 13
S&P 500 2,079 1.0 (1) (0) (1) 0 7 (1) 1 1
Russell 2000 1,254 1.0 1 3 2 6 9 1 0 4
FTSE 100 6,790 1.5 (3) (1) (2) (1) (9) (3) 3 1
Euro Stoxx 3,468 1.1 (0) (2) (2) (3) (12) (0) (2) 2
Source: Maybank Kim Eng, Factset, MSCI, data as of 8 June 2015
June 10, 2015 15
Strategy Research
Figure 20: Equity performance by country – relative performance
Index level
FX rate
--- Relative performance to MSCI Asia x Japan ---
Name -1w -1m -3m -6m -1y MTD QTD YTD
MSCI All Country World 427
1 3 (3) (4) (4) 1 (1) (4)
MSCI Emerging Market 977
(0) (2) (2) (5) (10) (0) (1) (4)
MSCI Asia Pac (inc JP) 147
(0) 1 (1) 1 (1) (0) (1) 1
MSCI Asia Pac x JP 483
(1) (1) (3) (3) (6) (1) (2) (3)
MSCI Asia x JP 598
MSCI Far East x JP 567
0 (0) 2 1 1 0 1 1
MSCI Emerging Asia 485
(0) (0) (1) (0) (0) (0) (1) (0)
MSCI EM Latin America 2,493
2 (4) (4) (17) (28) 2 0 (15)
MSCI EMMEA 265
(2) (6) (8) (13) (25) (2) (5) (8)
MSCI Frontie 586 4 2 (5) (12) (21) 4 (1) (10)
MSCI Asia x JP Small Cap 1,151
(1) 3 6 7 2 (1) 6 7
China - Shanghai Composite 5,132 6.2 14 24 57 69 149 14 35 53
China - H-shares 14,114 7.8 3 5 19 17 32 3 13 12
Hong Kong - HSI 27,316 7.8 2 3 10 9 14 2 8 10
Taiwan - TAIEX 9,368 31.1 (2) (1) (4) (3) (5) (2) (3) (4)
Korea - KOSPI 2,065 1,123 (1) (2) (1) (1) (10) (1) (1) (1)
Singapore - STI 3,320 1.4 (0) (1) (4) (7) (11) (0) (4) (10)
Malaysia - KLCI 1,739 3.8 (1) (4) (9) (13) (25) (1) (8) (14)
Thailand - SET 1,508 33.8 3 1 (10) (13) (4) 3 (5) (8)
Indonesia - JCI 5,015 13,380 (2) (0) (13) (16) (14) (2) (13) (17)
Philippines - PSEi 7,485 45.0 0 (1) (9) (2) 3 0 (8) (3)
India - Sensex 26,523 64.1 (2) 1 (15) (15) (6) (2) (9) (11)
Vietnam - Ho Chi Minh 580 21,815 4 9 (8) (6) (2) 4 3 (2)
Australia ASX 200 5,499 1.3 (3) (4) (11) (10) (21) (3) (8) (11)
New Zealand - NZX50 5,886 1.4 3 0 (7) (7) (9) 3 (6) (10)
Japan - Nikkei 225 20,457 125.3 1 5 2 6 7 1 1 6
Japan - TOPIX 1,662 125.3 1 5 2 7 6 1 2 7
S&P 500 2,079 1.0 1 4 (4) (4) 3 1 (1) (5)
Russell 2000 1,254 1.0 3 8 (1) 2 4 3 (1) (2)
FTSE 100 6,790 1.5 (0) 3 (5) (6) (14) (0) 2 (5)
Euro Stoxx 3,468 1.1 2 3 (5) (8) (17) 2 (4) (4)
Source: Maybank Kim Eng, Factset, MSCI, data as of 8 June 2015
June 10, 2015 16
Strategy Research
Figure 21: Equity performance by MSCI Asia ex Japan sector
--- Absolute performance ---
Name Index -1w -1m -3m -6m -1y MTD QTD YTD
MSCI Asia ex Japan 598 (3) (5) 3 4 4 (3) 1 6
Energy 579 (1) (7) 4 (1) (13) (1) 5 4
Materials 304 (3) (7) 3 3 (5) (3) 3 7
Industrials 187 (0) (2) 8 12 4 (0) 6 13
Capital goods 175 1 (1) 9 13 0 1 8 15
Transportation 228 (3) (6) 3 7 15 (3) 1 5
Consumer discretionary 467 (6) (10) (7) (12) (21) (6) (7) (8)
Automobiles & Components 724 (9) (14) (12) (16) (24) (9) (13) (12)
Retailing 289 (7) (8) 3 0 1 (7) 2 3
Consumer staples 442 (4) (5) 2 2 1 (4) (1) 5
Food/staples retail 120 (3) (4) 9 2 (8) (3) 7 5
Food/beverage/tobacco 368 (5) (4) (2) (5) (10) (5) (3) (3)
Health care 808 (5) (5) (1) 8 31 (5) (2) 11
Financials 359 (2) (3) 10 10 19 (2) 6 10
Banks 285 (1) (2) 7 6 12 (1) 5 6
Diversified financials 742 (2) (3) 29 27 47 (2) 22 30
Insurance 348 (2) (0) 15 20 42 (2) 9 19
Real estate 205 (3) (8) 3 5 9 (3) 1 7
Technology 370 (4) (6) (4) 3 1 (4) (4) 4
Software services 1,883 (2) (1) 2 9 20 (2) (1) 15
Tech hardware 185 (3) (7) (5) 1 5 (3) (6) 1
Semiconductors/equipment 363 (6) (7) (8) 0 (5) (6) (5) (0)
Telecoms 156 (2) (8) (1) 2 11 (2) (1) 5
Utilities 236 (2) (5) 0 (1) 1 (2) (0) 0
Source: Maybank Kim Eng, Factset, MSCI, data as of 8 June 2015
June 10, 2015 17
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Figure 22: Equity performance by MSCI Asia ex Japan sector – relative performance
--- Relative performance MSCI Asia ex Japan ---
Name Index -1w -1m -3m -6m -1y MTD QTD YTD
MSCI Asia ex Japan 598
Energy 579 1 (2) 1 (5) (17) 1 4 (2)
Materials 304 (0) (3) (0) (2) (10) (0) 2 1
Industrials 187 2 3 5 8 (1) 2 5 6
Capital goods 175 3 4 6 9 (4) 3 7 9
Transportation 228 (0) (1) 1 2 11 (0) (0) (1)
Consumer discretionary 467 (4) (5) (10) (16) (25) (4) (9) (14)
Automobiles & Components 724 (7) (9) (15) (20) (28) (7) (14) (18)
Retailing 289 (4) (3) 1 (4) (3) (4) 0 (3)
Consumer staples 442 (1) 0 (1) (2) (3) (1) (2) (1)
Food/staples retail 120 (0) 1 6 (2) (12) (0) 5 (1)
Food/beverage/tobacco 368 (2) 1 (5) (9) (14) (2) (4) (9)
Health care 808 (2) (0) (3) 4 26 (2) (3) 5
Financials 359 1 2 7 6 14 1 5 4
Banks 285 2 3 4 2 8 2 3 (1)
Diversified financials 742 1 2 26 22 43 1 20 24
Insurance 348 1 5 12 16 37 1 8 13
Real estate 205 (1) (4) 1 0 4 (1) 0 1
Technology 370 (1) (1) (7) (2) (4) (1) (6) (2)
Software services 1,883 0 4 (0) 5 16 0 (2) 9
Tech hardware 185 (1) (2) (8) (4) 0 (1) (7) (5)
Semiconductors/equipment 363 (3) (2) (11) (4) (10) (3) (6) (6)
Telecoms 156 1 (3) (4) (2) 7 1 (3) (1)
Utilities 236 1 (0) (2) (5) (4) 1 (2) (6)
Source: Maybank Kim Eng, Factset, MSCI, data as of 8 June 2015
June 10, 2015 18
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Figure 23: MSCI country valuation
PER (x) EPS growth YoY (%) RoE (%) P/BV (x) DY (%)
2014F 2015F 2016F 2014F 2015F 2016F 2014F 2015F 2016F 2014F 2015F 2016F 2014F 2015F 2016F
Asia-ex-Japan
13.5 13.0 11.8 8 10 10 12 11 12 1.6 1.5 1.4 2.6 2.6 2.8 China
10.9 12.1 10.6 6 7 14 14 13 13 1.5 1.6 1.4 3.0 2.5 2.9
Hong Kong
14.0 17.5 16.0 31 (18) 10 10 8 8 1.4 1.4 1.3 3.4 2.7 2.9
Taiwan
14.6 12.7 12.0 28 13 6 13 13 13 1.9 1.7 1.6 2.9 3.7 4.0
Korea
12.3 9.8 9.2 (8) 32 6 9 10 10 1.1 1.0 0.9 1.4 1.6 1.6
Singapore
13.9 13.7 12.6 15 0 9 10 10 10 1.4 1.3 1.2 3.5 3.7 4.0
Malaysia
17.3 16.1 14.7 4 8 9 12 11 12 2.0 1.8 1.7 3.0 3.1 3.4
Thailand
18.3 14.5 12.8 (23) 26 13 12 14 14 2.2 2.0 1.8 2.8 3.0 3.3
Indonesia
17.3 15.6 13.7 11 7 14 20 19 19 3.5 2.9 2.5 2.2 2.4 2.6
Philippines
22.7 20.1 17.9 23 13 12 14 14 14 3.3 2.8 2.6 2.0 1.9 2.0
India
21.3 19.2 16.1 9 14 19 15 15 16 3.2 3.0 2.6 1.4 1.5 1.7
Japan 17.2 16.9 15.2 19 13 11 9 9 9 1.5 1.5 1.4 1.7 1.8 1.9
US
18.3 17.7 15.8 5 5 12 14 15 16 2.8 2.7 2.5 2.0 2.1 2.2 Europe
18.6 15.2 13.6 15 37 11 9 9 9 1.5 1.5 1.5 3.7 3.5 3.8
Source: Maybank Kim Eng, Factset, MSCI, Bloomberg data as of 8 June 2015
Figure 24: MSCI Asia ex-Japan sector valuation
PER (x) EPS growth YoY (%) RoE(%) P/BV (x) DY (%)
2014F 2015F 2016F 2014F 2015F 2016F 2014F 2015F 2016F 2014F 2015F 2016F 2014F 2015F 2016F
Asia-ex-Japan
13.5 13.0 11.8 8 10 10 12 11 12 1.6 1.5 1.4 2.6 2.6 2.8
Energy
12.6 14.9 11.4 (22) (13) 31 9 7 9 1.1 1.1 1.0 3.1 2.4 3.0
Materials
19.0 14.9 12.8 (13) 46 16 6 8 9 1.1 1.2 1.1 2.5 2.6 2.6
Industrials
20.5 16.4 14.3 14 53 15 7 9 9 1.4 1.4 1.3 2.8 2.0 2.2 Capital goods
18.7 15.9 13.7 15 51 16 7 8 9 1.3 1.3 1.2 3.1 1.9 2.0
Transportation 25.2 27.9 17.6 15.8 11 62 11 6 9 9 1.6 1.6 1.5 2.1 2.3
Consumer discretionary 11.1 12.0 11.2 10.0 (5) 6 12 14 13 13 1.7 1.5 1.3 2.3 2.4 Automobiles & Components 8.3 8.7 7.8 7.1 (5) 8 10 15 14 14 1.3 1.1 1.0 1.7 2.1 Retailing
18.0 17.2 14.8 (2) 21 16 8 9 10 1.5 1.6 1.4 1.8 1.7 1.9
Consumer staples 25.3 26.5 23.5 20.4 5 24 15 12 13 13 3.1 3.0 2.7 1.8 1.8 Food/staples retail 25.3 26.7 26.1 21.8 (16) 34 20 7 8 9 2.0 2.0 1.9 1.8 1.8 Food/beverage/tobacco 22.5 23.1 20.0 17.7 6 22 13 12 12 13 2.6 2.4 2.2 2.1 2.1
Health care
29.3 28.2 22.7 28 24 24 14 15 16 4.2 4.3 3.7 0.8 0.8 0.9
Financials
11.0 11.2 10.3 14 9 9 11 11 11 1.3 1.2 1.1 3.1 3.0 3.2 Banks
8.8 8.9 8.2 9 8 8 14 13 13 1.2 1.2 1.1 3.9 3.7 4.0
Diversified financials 15.3 15.9 16.0 14.2 51 35 12 12 14 14 2.0 2.2 2.0 2.3 2.5 Insurance
17.1 17.1 15.2 41 15 12 12 11 11 2.0 1.9 1.7 1.3 1.4 1.6
Real estate
13.3 13.7 12.3 7 (1) 11 7 6 7 0.9 0.9 0.8 3.3 3.1 3.3
Technology
14.3 12.7 11.6 6 12 9 16 16 15 2.3 2.0 1.8 1.8 2.2 2.5 Software services 29.3 32.0 27.6 22.8 28 21 21 25 24 23 7.9 6.5 5.3 0.8 0.9 Tech hardware 10.8 10.8 9.9 9.2 37 9 7 13 13 13 1.4 1.3 1.2 2.1 2.5 Semiconductors/equipment 13.2 13.8 11.5 10.7 48 13 8 20 20 19 2.8 2.3 2.0 2.2 3.1
Telecoms
18.8 17.2 15.8 0 9 9 12 12 13 2.3 2.1 2.0 3.2 3.4 3.6
Utilities
9.4 11.5 12.9 100 (13) (11) 16 13 11 1.6 1.5 1.4 2.8 2.9 3.1
Source: Maybank Kim Eng, Factset, MSCI, Bloomberg data as of 8 June 2015
June 10, 2015 19
Strategy Research
Research Offices
REGIONAL
Sadiq CURRIMBHOY
Regional Head, Research & Economics
(65) 6231 5836 [email protected]
WONG Chew Hann, CA
Regional Head of Institutional Research
(603) 2297 8686 [email protected]
ONG Seng Yeow
Regional Head of Retail Research
(65) 6432 1453
ECONOMICS
Suhaimi ILIAS Chief Economist Singapore | Malaysia
(603) 2297 8682 [email protected]
Luz LORENZO Philippines (63) 2 849 8836
Tim LEELAHAPHAN Thailand (66) 2658 6300 ext 1420
JUNIMAN Chief Economist, BII Indonesia (62) 21 29228888 ext 29682 [email protected]
STRATEGY
Sadiq CURRIMBHOY
Global Strategist
(65) 6231 5836 [email protected]
Willie CHAN
Hong Kong / Regional
(852) 2268 0631 [email protected]
MALAYSIA
WONG Chew Hann, CA Head of Research (603) 2297 8686 [email protected] • Strategy
Desmond CH’NG, ACA (603) 2297 8680 [email protected] • Banking & Finance
LIAW Thong Jung (603) 2297 8688 [email protected] • Oil & Gas Services- Regional
ONG Chee Ting, CA (603) 2297 8678 [email protected] • Plantations - Regional
Mohshin AZIZ (603) 2297 8692 [email protected] • Aviation - Regional • Petrochem
YIN Shao Yang, CPA (603) 2297 8916 [email protected] • Gaming – Regional • Media
TAN Chi Wei, CFA (603) 2297 8690 [email protected] • Power • Telcos
WONG Wei Sum, CFA (603) 2297 8679 [email protected] • Property
LEE Yen Ling (603) 2297 8691 [email protected] • Building Materials • Glove • Ports • Shipping
CHAI Li Shin, CFA (603) 2297 8684 [email protected] • Plantation • Construction & Infrastructure
Ivan YAP (603) 2297 8612 [email protected] • Automotive • Semiconductor • Technology
Kevin WONG (603) 2082 6824 [email protected] • REITs • Consumer Discretionary
LIEW Wei Han
(603) 2297 8676 [email protected] • Consumer Staples
LEE Cheng Hooi Regional Chartist (603) 2297 8694 [email protected]
Tee Sze Chiah Head of Retail Research
(603) 2297 6858 [email protected]
HONG KONG / CHINA
Howard WONG Head of Research (852) 2268 0648 [email protected] • Oil & Gas - Regional
Alexander LATZER (852) 2268 0647 [email protected] • Metals & Mining – Regional
Benjamin HO (852) 2268 0632 [email protected] • Consumer & Auto
Jacqueline KO, CFA (852) 2268 0633 [email protected] • Consumer Staples & Durables
Jessica NG (852) 2268 0678 [email protected] • Utilities & Renewable Energy
Ka Leong LO, CFA (852) 2268 0630 [email protected] • Consumer Discretionary & Auto
Mitchell KIM (852) 2268 0634 [email protected] • Internet & Telcos
Osbert TANG, CFA (86) 21 5096 8370 [email protected] • Transport & Industrials
Ricky WK NG, CFA (852) 2268 0689 [email protected] • Utilities & Renewable Energy
Steven ST CHAN (852) 2268 0645 [email protected] • Banking & Financials - Regional
Warren LAU (852) 2268 0644 [email protected] • Technology – Regional
INDIA
Jigar SHAH Head of Research
(91) 22 6632 2632 [email protected]
• Oil & Gas • Automobile • Cement
Anubhav GUPTA
(91) 22 6623 2605 [email protected]
• Metal & Mining • Capital Goods • Property
Vishal MODI
(91) 22 6623 2607 [email protected]
• Banking & Financials
Abhijeet KUNDU
(91) 22 6623 2628 [email protected]
• Consumer
Neerav DALAL
(91) 22 6623 2606 [email protected]
• Software Technology • Telcos
Ritesh POLADIA
(91) 22 6623 2612 [email protected]
• Media & Entertainment
SINGAPORE
NG Wee Siang Head of Research (65) 6231 5838 [email protected] • Banking & Finance
Gregory YAP (65) 6231 5848 [email protected] • SMID Caps • Technology & Manufacturing • Telcos
YEAK Chee Keong, CFA (65) 6231 5842 [email protected] • Offshore & Marine
Derrick HENG, CFA (65) 6231 5843 [email protected] • Transport • Property • REITs (Office)
Joshua TAN (65) 6231 5850 [email protected] • REITs (Retail, Industrial)
WEI Bin (65) 6231 5844 [email protected] • Commodity • Logistics • S-chips
John CHEONG (65) 6231 5845 [email protected] • Small & Mid Caps • Healthcare
TRUONG Thanh Hang (65) 6231 5847 [email protected] • Small & Mid Caps
INDONESIA
Isnaputra ISKANDAR Head of Research (62) 21 2557 1129 [email protected] • Strategy • Metals & Mining • Cement
Rahmi MARINA (62) 21 2557 1128 [email protected] • Banking & Finance
Aurellia SETIABUDI (62) 21 2953 0785 [email protected] • Property
Pandu ANUGRAH (62) 21 2557 1137 [email protected] • Infra • Construction • Transport• Telcos
Janni ASMAN (62) 21 2953 0784 [email protected] • Cigarette • Healthcare • Retail
Adhi TASMIN (62) 21 2557 1209 [email protected] • Plantations
PHILIPPINES
Luz LORENZO Head of Research (63) 2 849 8836 [email protected] • Strategy • Utilities • Conglomerates • Telcos
Lovell SARREAL (63) 2 849 8841 [email protected] • Consumer • Media • Cement
Rommel RODRIGO (63) 2 849 8839 [email protected] • Conglomerates • Property • Gaming • Ports/ Logistics
Katherine TAN (63) 2 849 8843 [email protected] • Banks • Construction
Ramon ADVIENTO (63) 2 849 8845 [email protected] • Mining
Michael BENGSON (63) 2 849 8840 [email protected] • Conglomerates
Jaclyn JIMENEZ (63) 2 849 8842 [email protected] • Consumer
Arabelle MAGHIRANG (63) 2 849 8838 [email protected] • Banks
THAILAND
Maria LAPIZ Head of Institutional Research Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 [email protected] • Consumer • Materials • Ind. Estates
Sittichai DUANGRATTANACHAYA (66) 2658 6300 ext 1393 [email protected] • Services Sector • Transport
Sukit UDOMSIRIKUL Head of Retail Research (66) 2658 6300 ext 5090 [email protected]
Mayuree CHOWVIKRAN (66) 2658 6300 ext 1440 [email protected] • Strategy
Padon VANNARAT (66) 2658 6300 ext 1450 [email protected] • Strategy
Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 [email protected] • Auto • Conmat • Contractor • Steel
Suttatip PEERASUB (66) 2658 6300 ext 1430 [email protected] • Media • Commerce
Sutthichai KUMWORACHAI (66) 2658 6300 ext 1400 [email protected] • Energy • Petrochem
Termporn TANTIVIVAT (66) 2658 6300 ext 1520 [email protected] • Property
Jaroonpan WATTANAWONG (66) 2658 6300 ext 1404 [email protected] • Transportation • Small cap
Chatchai JINDARAT (66) 2658 6300 ext 1401 [email protected] • Electronics
VIETNAM
NGUYEN Thi Ngan Tuyen, Head of Retail Research (84) 8 44 555 888 x 8081 [email protected] • Food & Beverage • Oil&Gas • Banking
TRINH Thi Ngoc Diep (84) 4 44 555 888 x 8208 [email protected] • Technology • Utilities • Construction
PHAM Nhat Bich (84) 8 44 555 888 x 8083 [email protected] • Consumer • Manufacturing • Fishery
NGUYEN Thi Sony Tra Mi (84) 8 44 555 888 x 8084 [email protected] • Port operation • Pharmaceutical • Food & Beverage
June 10, 2015 20
Strategy Research
APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES
DISCLAIMERS
This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.
The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.
This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events.
MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report.
This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect.
This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report.
Malaysia
Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.
Singapore
This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.
Thailand
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 may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result.
Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect.
US
This research report prepared by MKE is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations.
UK
This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.
June 10, 2015 21
Strategy Research
Disclosure of Interest
Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies.
Singapore: As of 10 June 2015, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.
Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.
Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.
As of 10 June 2015, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.
MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.
OTHERS
Analyst Certification of Independence
The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
Reminder
Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.
Definition of Ratings
Maybank Kim Eng Research uses the following rating system
BUY Return is expected to be above 10% in the next 12 months (excluding dividends)
HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends)
SELL Return is expected to be below -10% in the next 12 months (excluding dividends)
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.
DISCLOSURES
Legal Entities Disclosures
Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Maybank Kim Eng Securities JSC (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.
June 10, 2015 22
Strategy Research
Malaysia Maybank Investment Bank Berhad
(A Participating Organisation of
Bursa Malaysia Securities Berhad)
33rd Floor, Menara Maybank,
100 Jalan Tun Perak,
50050 Kuala Lumpur
Tel: (603) 2059 1888;
Fax: (603) 2078 4194
Singapore Maybank Kim Eng Securities Pte Ltd
Maybank Kim Eng Research Pte Ltd
50 North Canal Road
Singapore 059304
Tel: (65) 6336 9090
London Maybank Kim Eng Securities
(London) Ltd
5th Floor, Aldermary House
10-15 Queen Street
London EC4N 1TX, UK
Tel: (44) 20 7332 0221
Fax: (44) 20 7332 0302
New York Maybank Kim Eng Securities USA
Inc
777 Third Avenue, 21st Floor
New York, NY 10017, U.S.A.
Tel: (212) 688 8886
Fax: (212) 688 3500
Stockbroking Business:
Level 8, Tower C, Dataran Maybank,
No.1, Jalan Maarof
59000 Kuala Lumpur
Tel: (603) 2297 8888
Fax: (603) 2282 5136
Hong Kong Kim Eng Securities (HK) Ltd
Level 30,
Three Pacific Place,
1 Queen’s Road East,
Hong Kong
Tel: (852) 2268 0800
Fax: (852) 2877 0104
Indonesia PT Maybank Kim Eng Securities
Plaza Bapindo
Citibank Tower 17th Floor
Jl Jend. Sudirman Kav. 54-55
Jakarta 12190, Indonesia
Tel: (62) 21 2557 1188
Fax: (62) 21 2557 1189
India Kim Eng Securities India Pvt Ltd
2nd Floor, The International 16,
Maharishi Karve Road,
Churchgate Station,
Mumbai City - 400 020, India
Tel: (91) 22 6623 2600
Fax: (91) 22 6623 2604
Philippines Maybank ATR Kim Eng Securities Inc.
17/F, Tower One & Exchange Plaza
Ayala Triangle, Ayala Avenue
Makati City, Philippines 1200
Tel: (63) 2 849 8888
Fax: (63) 2 848 5738
Thailand Maybank Kim Eng Securities
(Thailand) Public Company Limited
999/9 The Offices at Central World,
20th - 21st Floor,
Rama 1 Road Pathumwan,
Bangkok 10330, Thailand
Tel: (66) 2 658 6817 (sales)
Tel: (66) 2 658 6801 (research)
Vietnam Maybank Kim Eng Securities Limited
4A-15+16 Floor Vincom Center Dong
Khoi, 72 Le Thanh Ton St. District 1
Ho Chi Minh City, Vietnam
Tel : (84) 844 555 888
Fax : (84) 8 38 271 030
Saudi Arabia In association with
Anfaal Capital
Villa 47, Tujjar Jeddah
Prince Mohammed bin Abdulaziz
Street P.O. Box 126575
Jeddah 21352
Tel: (966) 2 6068686
Fax: (966) 26068787
South Asia Sales Trading Kevin Foy
Regional Head Sales Trading
Tel: (65) 6336-5157
US Toll Free: 1-866-406-7447
North Asia Sales Trading Alex Tsun
Tel: (852) 2268 0228
US Toll Free: 1 877 837 7635
Malaysia Rommel Jacob [email protected] Tel: (603) 2717 5152
Thailand Tanasak Krishnasreni [email protected] Tel: (66)2 658 6820
Indonesia Harianto Liong [email protected] Tel: (62) 21 2557 1177
New York Andrew Dacey [email protected] Tel: (212) 688 2956
India Manish Modi [email protected] Tel: (91)-22-6623-2601
Vietnam Tien Nguyen [email protected]
Tel: (84) 44 555 888 x8079
Philippines Keith Roy [email protected] Tel: (63) 2 848-5288
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