Friday, 21 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 Small/Mid Caps Page 2 Stocks for a volatile market. Alibaba Group (BABA US/BUY/US$162.63/Target: US $225.00) Page 5 Alibaba Investor Day: New generation of digitalisation. HONG KONG Results New World Development (17 HK/BUY/HK$10.36/Target: HK$13.30) Page 9 FY18: In line with expectations. INDONESIA Update Ace Hardware Indonesia (ACES IJ/BUY/Rp1,420/Target: Rp1,700) Page 12 Stable margins despite rupiah depreciation; upgrade to BUY. MALAYSIA Results Scientex (SCI MK/BUY/RM8.57/Target: RM10.41) Page 15 4QFY18: Earnings rise 79.7% qoq and 45.5% yoy, supported by maiden contribution from KHPI and normalised earnings at its property segment post last quarter’s weakness. SINGAPORE Update Keppel Corporation (KEP SP/HOLD/S$6.80/Target: S$7.37) Page 18 Makes first foray into the Nanjing property market. THAILAND Update The Erawan Group (ERW TB/BUY/Bt8.05/Target: Bt10.50) Page 21 3Q18 results preview: Earnings hiccup should be no surprise. KEY INDICES Prev Close 1D % 1W % 1M % YTD % DJIA 26657.0 1.0 2.0 3.2 7.8 S&P 500 2930.8 0.8 0.9 2.4 9.6 FTSE 100 7367.3 0.5 1.2 (2.6) (4.2) AS30 6276.9 (0.3) 0.6 (1.7) 1.8 CSI 300 3310.1 (0.1) 2.3 (0.5) (17.9) FSSTI 3180.4 0.1 1.6 (0.6) (6.5) HSCEI 10792.6 0.5 2.8 0.5 (7.8) HSI 27477.7 0.3 1.7 (1.0) (8.2) JCI 5931.3 1.0 1.2 (0.2) (6.7) KLCI 1803.7 0.2 0.6 0.3 0.4 KOSPI 2323.5 0.6 1.6 2.4 (5.8) Nikkei 225 23674.9 0.0 4.7 6.5 4.0 SET 1752.1 0.1 2.0 3.4 (0.1) TWSE 10831.4 (0.2) 1.0 0.4 1.8 BDI 1373 1.3 (0.7) (20.5) 0.5 CPO (RM/mt) 2136 (1.8) (3.3) (2.4) (10.6) Brent Crude (US$/bbl) 79 (0.9) 0.7 9.0 17.7 Source: Bloomberg TOP PICKS Ticker CP (lcy) TP (lcy) Pot. +/- (%) BUY Baoshan Iron & Steel 600019 CH 7.70 9.53 23.8 Gudang Garam GGRM IJ 75,500.00 85,000.00 12.6 PP Persero PTPP IJ 1,510.00 3,700.00 145.0 CIMB CIMB MK 6.14 6.70 9.1 OCBC OCBC SP 11.10 13.68 23.2 SingTel ST SP 3.15 3.98 26.3 Siam Cement SCC TB 450.00 530.00 17.8 SELL Hartalega HART MK 6.60 4.02 (39.1) KEYASSUMPTIONS 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