Regional Morning Notes

UOBKayHian Regional Morning Notes Monday, August 02, 2010 Refer to last page for important disclosures. Page 1 of 35 CHINA Economy PMI Page 3 July PMI declines to 51.2%, 0.2ppt below consensus of 51.4%, and a 17$month low. Sector Consumer Page 5 China Resources Enterprise, an emerging leader in multiple consumer sectors. HONG KONG Sector Banking Page 7 Hong Kong financial system’s pre$eminence acknowledged. Property Page 9 Overall home prices continue to head up, as investors/punters chase after laggard estates. INDONESIA Results Bank Central Asia (HOLD/Rp5,950/Fair: Rp6,750) Page 11 1H10: Stronger loan growth of 23% while net profit grows 20% yoy. Maintain HOLD with fair price upgraded to Rp6,750. Bank Rakyat Indonesia (BUY/Rp9,900/Target: Rp11,500) Page 14 1H10: Results in line. Expect more upside from faster loan growth and lower effective tax rate. Maintain BUY and raise target price to Rp11,500 Holcim Indonesia (BUY/Rp2,375/Target: Rp2,750) Page 17 2Q10: Net profit below expectation due to higher operating cost and lower forex gain. Outlook still positive. Maintain BUY with lower TP of Rp2,750. Update Astra Agro Lestari (BUY/Rp19,500/Target: Rp24,000) Page 20 Key highlights from analyst briefing post 1H10 results. MALAYSIA Sector Banking Page 23 Loan growth accelerates in June, driven by business loans. Maintain OVERWEIGHT and our picks are CIMB Group and Maybank. Update Tanjong PLC (BUY/RM17.88/Target: RM21.80) Page 25 A very attractive offer. Tanjong taken private will be worth much more. SINGAPORE Sector Banking Page 28 Jun 10: Two engines of loan growth – consumers and businesses. KEY STORY Malaysia Tanjong PLC (BUY/RM17.88/Target: RM21.80) Page 25 A very attractive offer. Tanjong taken private will be worth much more. Key Indices Prev Close 1D % 1W % 1M % YTD % DJIA 10465.9 (0.0) 0.4 8.0 0.4 S&P 500 1101.6 0.0 (0.1) 7.7 (1.2) FTSE 100 5258.0 (1.1) (1.0) 8.7 (2.9) AS30 4507.4 (0.6) 0.7 5.7 (7.7) CSI 300 2868.8 (0.3) 2.7 13.2 (19.8) FSSTI 2987.7 (0.3) 0.5 5.0 3.1 HSI 21029.8 (0.3) 1.0 5.6 (3.9) JCI 3069.3 (0.9) 0.9 6.9 21.1 KLCI 1360.9 0.2 1.1 4.1 6.9 KOSPI 1759.3 (0.7) 0.1 5.2 4.5 Nikkei 225 9537.3 (1.6) 1.1 3.6 (9.6) SET 855.8 0.1 2.7 6.6 16.5 TWSE 7760.6 (0.5) (0.0) 5.9 (5.2) BDI 1967 1.3 7.7 (18.2) (34.5) CPO (RM/mt) 2587 1.2 2.1 5.3 (0.1) Nymex Crude (US$/bbl) 79 0.8 (0.0) 4.4 (0.5) Source: Bloomberg Top BUYs/SELLs Current Target Pot. +/$ Price Price (%) Ticker (lcy) (lcy) Top BUYs China Merchants Bk 3968 HK 20.75 26.50 27.7 CNOOC 883 HK 13.08 17.80 36.1 SJM Holdings 880 HK 6.85 8.00 16.8 Hong Leong Bank HLBK MK 9.01 10.00 11.0 WCT WCT MK 2.83 3.40 20.1 OCBC OCBC SP 9.03 12.38 37.1 SATS SATS SP 2.92 3.36 15.1 Swiber SWIB SP 1.03 1.54 49.5 Bangkok Bank BBL TB 136.50 181.00 32.6 PTT PTT TB 254.00 338.00 33.1 Top SELLs Top Glove TOPG MK 6.64 5.12 (22.9) TMB Bank TMB TB 1.96 0.63 (67.9) 2009 2010F 2011F GDP (% yoy) US (2.40) 3.10 2.90 Euro Zone (4.10) 1.10 1.30 Japan (5.23) 3.25 1.70 Singapore (1.25) 13.80 4.80 Malaysia (1.70) 6.10 5.10 Thailand (2.20) 5.50 4.70 Indonesia 4.55 6.00 6.20 Hong Kong (2.70) 4.00 4.50 China 9.10 9.50 8.30 Brent Crude Oil (US$/bbl) 62 75 85 Aluminium * (US$/mt) 1,671 2,137 2,194 Copper * (US$/mt) 5,178 7,102 7,508 Gold Price London * (US$/ounce) 974 1,161 1,225 Iron Ore * (USc/dmtu) 85 120 106 CPO (US$/mt) 670 776 716 BDI 2,617 3,000 3,300 * Bloomberg Source: UOB, UOB Kay Hian Key Assumptions Venue Beg Close Singapore Market Strategy 2H10 HK 4 Aug 4 Aug Analyst Presentation Luk Fook SG 4 Aug 5 Aug Post$results Corporate Roadshow CWT Limited SG 10 Aug 10 Aug Luncheon Presentation Regional Gaming Sector NY 9 Aug 9 Aug Analyst Presentation TORONTO 10 Aug 12 Aug MONTREAL 13 Aug 13 Aug Hengdeli Holdings SG 16 Aug 17 Aug Post$results Corporate Roadshow KL 18 Aug 18 Aug Corporate Events Regional Morning Notes Monday, August 02, 2010 Refer to last page for important disclosures. Page 2 of 35 Property Page 30 Property Nuggets: Hospitality – Positive signs all around. Results DBS Group Holdings (BUY/S$14.40/Target: S$19.44) Page 32 2Q10: Awesome loan growth, writes off goodwill in Hong Kong. Operationally, a good set of results. Regional Morning Notes Monday, August 02, 2010 Refer to last page for important disclosures. Page 3 of 35 Economics - China July PMI declines to 51.2%, 0.2ppt below consensus of 51.4%,