Regional Morning Notes

Friday, 07 September 20181 Refer to last page for important disclosures. Regional Morning Notes PLEASE CLICK ON THE PAGE NUMBER TO MOVE TO THE RELEVANT PAGE. CHINA Sector Healthcare Page 2 Expect strong growth momentum to continue in 2H18; stay cautious on GPO price cuts. IT Hardware Page 4 Handset components: 1H18 results wrap-up; big miss with margin squeeze. Seasonal uptrend in 2H18. Results Ctrip.com International (CTRP US/BUY/US$36.97/Target: US$52.00) Page 7 2Q18: Stronger-than-expected margin improvement. INDONESIA Strategy A Major Crisis Unlikely In Indonesia Page 10 Indonesia’s economy is larger and foreign reserve is 6.8x higher than the pre-AFC level. BUY: GGRM, SIDO, LPPF, BBNI and BMRI. MALAYSIA Strategy Minimal Impact From New Minimum Wage Page 12 The increase in minimum wage is smaller than expected and has a marginal impact on market earnings; plantation sector is moderately impacted. Update Magnum (MAG MK/BUY/RM1.95/Target: RM2.26) Page 14 To restore close to 100% dividend payout which translates to a >7% yield. U-Mobile monetisation (RM400m; 14% of market cap) serves as a key catalyst. SINGAPORE Sector Telecommunications Page 17 Delay brings reprieve. Upgrade to OVERWEIGHT. THAILAND Update Diamond Building Products (DRT TB/BUY/Bt5.90/Target: Bt7.50) Page 19 Strong earnings growth to resume next year. Share price offers attractive 6% annual yield. KEY INDICES Prev Close 1D % 1W % 1M % YTD % DJIA 25995.9 0.1 (0.5) 1.4 5.2 S&P 500 2878.1 (0.4) (1.2) 0.7 7.6 FTSE 100 7319.0 (0.9) (2.6) (5.2) (4.8) AS30 6267.8 (1.1) (3.0) (1.2) 1.6 CSI 300 3262.9 (1.1) (2.6) (3.1) (19.1) FSSTI 3147.7 (0.3) (2.4) (5.8) (7.5) HSCEI 10578.6 (0.6) (3.5) (2.6) (9.7) HSI 26974.8 (1.0) (4.2) (4.5) (9.8) JCI 5776.1 1.6 (4.0) (5.2) (9.1) KLCI 1798.6 0.2 (1.2) 0.4 0.1 KOSPI 2287.6 (0.2) (0.9) (0.5) (7.3) Nikkei 225 22487.9 (0.4) (1.7) (0.8) (1.2) SET 1693.9 0.4 (1.5) (0.8) (3.4) TWSE 10924.3 (0.6) (1.5) (0.5) 2.6 BDI