REGIONAL MORNING NOTES

Monday, 22 August 2016Refer to last page for important disclosures. 1 Regional Morning Notes PLEASE CLICK ON THE PAGE NUMBER TO MOVE TO THE RELEVANT PAGE. CHINA Sector Aviation Page 21H16 results preview. Expecting 20-57% yoy core net profit growth. Coal Page 4Coal price rebounds at a faster-than-expected rate; expect a retreat in autumn and another rebound in winter. Results Sino-Ocean Land (3377 HK/HOLD/HK$3.68/Target: HK$3.70) Page 61H16: Core earnings below expectations; gross margin finally improves. Wasion Group Holdings (3393 HK/SELL/HK$4.57/Target: HK$2.90) Page 91H16: Earnings miss on mounting margin pressure and lower meter sales. Zhuzhou CRRC Times Electric (3898 HK/HOLD/HK$48.10/Target: HK$49.30)Page 121H16: Gross margin contraction to weigh on earnings growth momentum; downgrade to HOLD. HONG KONG Results Bank of East Asia (23 HK/SELL/HK$32.45/Target: HK$23.00) Page 151H16: Earnings miss on weaker fees; M&A still the key to watch out for. INDONESIA Results Tiga Pilar Sejahtera Food (AISA IJ/BUY/Rp2,280/Target: Rp2,550) Page 181H16: Net income grows 30.5% yoy, driven by the rice business; upgrade to BUY. MALAYSIA Update AirAsia (AIRA MK/SELL/RM3.20/Target: RM2.50) Page 21Euphoric rise in share price overdone; downgrade to SELL. MISC (MISC MK/HOLD/RM7.53/Target: RM7.50) Page 24Share price may see weakness ahead to reflect its high correlation with tanker rates, which have fallen to multi-year lows in 3Q16. SINGAPORE Sector Telecommunications Page 27MyRepublic And OMGtel benefit from China’s “Go Global” strategy. Update Genting Singapore (GENS SP/BUY/S$0.76/Target: S$0.84) Page 29We expect share price to recover in tandem with the expected EBITDA recovery in 2H16 although upside is capped by the negative spillover effect from the O&G industry. THAILAND Update CH Karnchang (CK TB/BUY/Bt32.00/Target: Bt40.00) Page 32Can deliver spectacular earnings growth even with no contribution from mega projects. KEY INDICES Prev Close 1D % 1W % 1M % YTD % DJIA 18552.6 (0.2) (0.1) (0.1) 6.5 S&P 500 2183.9 (0.1) (0.0) 0.4 6.8 FTSE 100 6859.0 (0.1) (0.8) 1.9 9.9 AS30 5625.4 0.3 (0.0) 0.9 5.3 CSI 300 3365.0 0.0 2.1 4.3 (9.8) FSSTI 2844.0 0.2 (0.8) (3.4) (1.3) HSCEI 9606.2 (0.5) 0.5 6.4 (0.6) HSI 22937.2 (0.4) 0.7 4.4 4.7 JCI 5416.0 (0.8) (0.1) 4.2 17.9 KLCI 1687.7 (0.4) 0.2 1.8 (0.3) KOSPI 2056.2 0.0 0.4 2.3 4.8 Nikkei 225 16545.8 0.4 (2.2) (0.5) (13.1) SET 1538.8 (0.5) (0.9) 2.0 19.5 TWSE 9034.3 (1.0) (1.3) 0.2 8.3 BDI 683 0.1 1.8 (4.9) 42.9 CPO (RM/mt) 2828 0.3 9.5 21.6 28.5 Brent Crude (US$/bbl) 51 (0.7) 4.5 10.6 35.6 Source: Bloomberg TOP PICKS Ticker CP (lcy) TP (lcy) Pot. +/- (%) BUY Air China 753 HK 5.98 9.00 50.5 Ping An Insurance 2318 HK 41.05 47.00 14.5 Ciputra Property CTRP IJ 635.00 960.00 51.2 Indosat ISAT IJ 6,300.00 9,500.00 50.8 Genting Bhd GENT MK 8.20 10.40 26.8 City Dev CIT SP 8.73 10.36 18.7 OCBC OCBC SP 8.45 10.48 24.0 Bangkok Dusit BDMS TB 22.80 25.75 12.9 Siam Cement SCC TB 512.00 630.00 23.0 SELL Hartalega HART MK 4.26 3.10 (27.2) KEY ASSUMPTIONS GDP (% yoy) 2015 2016F 2017F US 2.4 2.5 2.7 Euro Zone