Friday, 14 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 Strategy Consumption Slowdown Page 2 Impact on air travel and Macau gaming. Sector Consumer Discretionary Page 5 Catering: Leading players’ market share gains to counter macro headwinds. HONG KONG Results Sun Hung Kai Properties (16 HK/BUY/HK$114.70/Target: HK$146.00) Page 7 FY18: Solid results; in line with expectations. INDONESIA Sector Consumer Page 10 Increase in selling prices likely to offset rupiah depreciation. MALAYSIA Update DiGi.Com (DIGI MK/BUY/RM4.61/Target: RM5.40) Page 12 Expected to deliver above-industry three-year net profit CAGR of 5%. With this and a sustainable dividend yield of 4%, the stock is a safe haven amid market volatility. SINGAPORE Strategy Safety First Page 15 Given the external uncertainties, we would adopt a defensive stance and prefer mid-caps with visible earnings, high net cash and sustainable dividend yields. Key picks: CSE, Valuetronics and PropNex. Update ST Engineering (STE SP/BUY/S$3.29/Target: S$3.80) Page 17 Acquisition will provide STE with a critical path to the aircraft manufacturing supply chain. THAILAND Sector Property Page 20 2H18 outlook – A ray of light from property market recovery. KEY INDICES Prev Close 1D % 1W % 1M % YTD % DJIA 26146.0 0.6 0.6 3.3 5.8 S&P 500 2904.2 0.5 0.9 2.3 8.6 FTSE 100 7281.6 (0.4) (0.5) (4.3) (5.3) AS30 6239.9 (0.7) (0.4) (2.3) 1.2 CSI 300 3236.6 1.1 (0.8) (4.0) (19.7) FSSTI 3131.8 0.2 (0.5) (3.4) (8.0) HSCEI 10503.0 2.6 (0.7) (2.2) (10.3) HSI 27014.5 2.5 0.1 (2.7) (9.7) JCI 5858.3 1.0 3.1 1.5 (7.8) KLCI 1792.6 0.4 (0.2) 0.5 (0.2) KOSPI 2286.2 0.1 (0.1) 1.2 (7.3) Nikkei 225 22821.3 1.0 1.5 2.1 0.2 SET 1718.0 2.3 1.4 1.3 (2.0) TWSE 10727.2 0.0 (1.8) (0.9) 0.8 BDI 1411 (1.9) (4.9) (18.2) 3.3 CPO (RM/mt) 2210 (0.1) (0.6) 0.1 (7.6) Brent Crude (US$/bbl) 78 (2.0) 2.2 7.7 16.9 Source: Bloomberg TOP PICKS Ticker CP (lcy) TP (lcy) Pot. +/- (%) BUY Baoshan Iron & Steel 600019 CH 7.24 9.53 31.6 Gudang Garam GGRM IJ 74,400.00 85,000.00 14.2 PP Persero PTPP IJ 1,550.00 3,700.00 138.7 CIMB CIMB MK 6.09 6.70 10.0 OCBC OCBC SP 11.14 13.68 22.8 SingTel ST SP 3.11 3.98 28.0 Siam Cement SCC TB 442.00 530.00 19.9 SELL Hartalega HART MK 6.70 4.02 (40.0) 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 5.9 5.0 5.3 Thailand 3.9 4.2 4.2 Indonesia 5.1 5.3 5.4