Thursday, 13 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 Economics Monetary Policy Page 2 M2 growth disappoints, though new TSF beats expectations. PBOC may have to step up monetary easing. Sector Healthcare Page 3 Stay cautious on GPO’s price cut; substitution of imported drugs to accelerate. Sportswear Page 5 Thematic: Consumption slowdown and its impact on sportswear. INDONESIA Small/Mid Cap Highlights Sri Rejeki Isman (SRIL IJ/NOT RATED/Rp340) Page 8 Natural hedging neutralises currency risk. MALAYSIA Sector Oil & Gas Page 11 OSV utilisation seems to be recovering from the inflection point, but charter rates may remain low. New players with strong balance sheets and low costs may have an edge over distressed peers. Plantation Page 13 Aug 18: Inventory increases to 2.49m tonnes, higher than market expectations, due to weaker-than-expected exports. Update Sapura Energy (SAPE MK/HOLD/RM0.35/Target: RM0.31) Page 15 We think the strategic partnership for energy is better than taking the IPO route. With the asset monetisation and recapitalisation exercises in motion, balance sheet is expected to de-gear materially. SINGAPORE Update Singapore Press Holdings (SPH SP/HOLD/S$2.74/Target: S$2.58) Page 18 Johnny come lately. THAILAND Update Central Pattana (CPN TB/BUY/Bt81.25/Target: Bt90.50) Page 21 CPN closing the deal with GLAND. Mega Lifesciences (MEGA TB/HOLD/Bt35.75/Target: Bt33.00) Page 24 Short-term profitability impacted by more contribution from low-margin business. Maintain HOLD as this has been priced in. KEY INDICES Prev Close 1D % 1W % 1M % YTD % DJIA 25998.9 0.1 0.1 3.2 5.2 S&P 500 2888.9 0.0 0.0 2.4 8.1 FTSE 100 7313.4 0.5 (0.9) (4.3) (4.9) AS30 6283.9 (0.1) (0.9) (0.9) 1.9 CSI 300 3202.0 (0.7) (2.9) (5.6) (20.6) FSSTI 3124.7 0.5 (1.0) (3.7) (8.2) HSCEI 10238.8 (0.9) (3.8) (4.9) (12.6) HSI 26345.0 (0.3) (3.3) (5.7) (11.9) JCI 5798.2 (0.6) (1.8) (1.1) (8.8) KLCI 1785.3 (0.8) (1.5) 0.1 (0.6) KOSPI 2282.9 (0.0) (0.4) 1.5 (7.5) Nikkei 225 22604.6 (0.3) 0.1 3.4 (0.7) SET 1679.4 0.4 (0.4) (1.6) (4.2) TWSE 10722.6 (0.3) (2.5) (0.2) 0.7 BDI 1439 (2.9) (2.6) (14.9) 5.3 CPO (RM/mt) 2211 (0.3) 1.5 1.2 (7.5) Brent Crude (US$/bbl) 80 0.9 3.2 9.5 19.2 Source: Bloomberg TOP PICKS Ticker CP (lcy) TP (lcy) Pot. +/- (%) BUY Baoshan Iron & Steel 600019 CH 7.20 9.53 32.4 Gudang Garam GGRM IJ 74,000.00 85,000.00 14.9 PP Persero PTPP IJ 1,580.00 3,700.00 134.2 CIMB CIMB MK 5.90 6.70 13.6 OCBC OCBC SP 11.04 13.68 23.9 SingTel ST SP 3.10 3.98 28.4 Siam Cement SCC TB 434.00 530.00 22.1 SELL Hartalega HART MK 6.76 4.02 (40.5) KEY ASSUMPTIONS GDP (% yoy) 2017 2018F 2019F US 2.3 2.5 2.3 Euro Zone 2.4 2.3 1.9 Japan 1.7 1.8 1.9 Singapore 3.6 2.8 3.0 Malaysia