Thursday, 20 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 Aviation Page 2 No signs of demand weakness despite a weak renminbi. Steel Page 4 Weekly: China might relax winter production curbs with more flexibility at local government level. Results Nine Dragons Paper (2689 HK/BUY/HK$9.50/Target: HK$13.50) Page 6 FY18: Results beat expectations with net profit up 79% yoy. The worst case of a trade war has been mostly priced in. Maintain BUY. INDONESIA Sector Banking Page 9 Rupiah depreciation impact on NPL; manageable only up to a certain level. MALAYSIA Sector Building Materials Page 11 Steel prices unchanged since Jul 18 but slight recovery seen in steel demand. Expect mild earnings growth in 3Q18. Results Berjaya Sports Toto (BST MK/HOLD/RM2.29/Target: RM2.26) Page 13 1QFY19: Earnings growth driven by tax holiday, lower prize payout and better performance from H.R. Owen, but ticket sales per draw estimated to have dropped 3% yoy (likely on FIFA World Cup’s impact). SINGAPORE Small/Mid Cap Highlights Valuetronics Holdings (VALUE SP/BUY/S$0.63/Target: S$0.96) Page 16 Attractive valuation; expect minimal impact from the flood at Danshui plant. THAILAND Initiate Coverage VGI Global Media (VGI TB/SELL/Bt8.05/Target: Bt6.00) Page 19 A reality check on Thailand’s largest listed media company. KEY INDICES Prev Close 1D % 1W % 1M % YTD % DJIA 26405.8 0.6 1.6 2.5 6.8 S&P 500 2908.0 0.1 0.7 1.8 8.8 FTSE 100 7331.1 0.4 0.2 (3.4) (4.6) AS30 6297.0 0.4 0.2 (2.1) 2.1 CSI 300 3312.5 1.3 3.4 1.4 (17.8) FSSTI 3176.6 1.2 1.7 (0.9) (6.7) HSCEI 10741.7 1.7 4.9 1.0 (8.3) HSI 27407.4 1.2 4.0 (0.7) (8.4) JCI 5873.6 1.1 1.3 (0.3) (7.6) KLCI 1800.7 0.4 0.9 0.7 0.2 KOSPI 2308.5 (0.0) 1.1 2.7 (6.4) Nikkei 225 23672.5 1.1 4.4 6.6 4.0 SET 1749.8 0.3 4.2 2.8 (0.2) TWSE 10857.3 0.9 1.3 1.5 2.0 BDI 1356 (0.1) (3.9) (21.3) (0.7) CPO (RM/mt) 2175 (1.5) (1.7) (0.6) (9.0) Brent Crude (US$/bbl) 79 0.5 (0.4) 10.5 18.7 Source: Bloomberg TOP PICKS Ticker CP (lcy) TP (lcy) Pot. +/- (%) BUY Baoshan Iron & Steel 600019 CH 7.67 9.53 24.3 Gudang Garam GGRM IJ 74,500.00 85,000.00 14.1 PP Persero PTPP IJ 1,480.00 3,700.00 150.0 CIMB CIMB MK 6.12 6.70 9.5 OCBC OCBC SP 11.12 13.68 23.0 SingTel ST SP 3.16 3.98 25.9 Siam Cement SCC TB 454.00 530.00 16.7 SELL Hartalega HART MK 6.59 4.02 (39.0) KEY ASSUMPTIONS GDP (% yoy) 2017 2018F 2019F US 2.2 2.7 2.3 Euro Zone 2.4 2.1 1.8 Japan 1.7 1.2 1.1 Singapore 3.6 3.2 2.8 Malaysia 5.9 4.8 4.8 Thailand 3.9 4.5 4.2 Indonesia 5.1 5.3 5.4 Hong Kong 3.8 3.8 2.8 China 6.9 6.4 6.2 CPO (RM/m