Comprehensive Analysis of Key Companies in Greater China, Indonesia, Malaysia, and Thailand Markets

Broker: UOB Kay Hian

Date: November 4, 2024

Greater China Market Overview

Alpha Picks: November Conviction Calls

The Hang Seng Index (HSI) and MSCI China experienced declines of 3.9% and 5.9% month-on-month respectively in October, as investors took profit pending further details on the expected fiscal package. With the fiscal stimulus largely priced in, the focus shifts to stocks with specific catalysts in the near term.

Hansoh Pharma (3692 HK)

We add Hansoh Pharma to our BUY list due to its strong revenue and earnings growth for 2024, continued efforts in R&D, new drug/indication approvals, and productive business development programmes. The target price is HK\$29.00, reflecting a significant upside of 62.6%.

Sands China (1928 HK)

Sands China is added to the BUY list due to its faster gross gaming revenue (GGR) recovery momentum. The target price is set at HK\$28.60, indicating an upside of 36.8%.

China State Construction Engineering Corporation (CSCEC) (601668 CH)

CSCEC is added to the BUY list due to its stronger-than-expected debt reduction plan announced by the National People’s Congress (NPC). The target price is HK\$6.79, with an upside potential of 10.4%.

BYD Electronic (BYDE) (285 HK)

BYDE is added to the BUY list due to positive developments in Apple Intelligence and BYD’s shipment growth. The target price is HK\$40.90, with an upside of 25.7%.

Sinopharm (1099 HK)

Sinopharm is added to the SELL list due to its 9M24 results miss and weak growth visibility in 2024-26, with policy uncertainties challenging earnings growth. The target price is HK\$18.00, indicating a downside of 7.7%.

Indonesia Market Overview

Alpha Picks: Underperformance in October 2024

Our aggressive stance in October did not work out, as bank stocks softened and some picks underperformed. Our portfolio declined by an average of 1.9% compared to the Jakarta Composite Index (JCI)’s 0.6% rise.

Bank Tabungan Negara (BBTN)

BBTN is included in the BUY list with a target price of Rp1,740, reflecting an upside of 23.0%. The bank is expected to benefit from selling another Rp1.5 trillion in bad loans this year.

Bank Mandiri (BMRI)

BMRI is included in the BUY list with a target price of Rp8,120, indicating an upside of 22.1%. The bank is expected to benefit from rate cuts easing the pressure on the cost of funds (CoF).

Bank Negara Indonesia (BBNI)

BBNI is included in the BUY list with a target price of Rp6,560, reflecting an upside of 26.2%. The bank is expected to benefit from rate cuts easing the pressure on CoF.

Bank Rakyat Indonesia (BBRI)

BBRI is included in the BUY list with a target price of Rp5,600, indicating an upside of 19.1%. The bank is expected to benefit from rate cuts easing the pressure on CoF.

XL Axiata (EXCL)

EXCL is included in the BUY list with a target price of Rp2,900, reflecting an upside of 28.9%. The company’s 4Q24 results could benefit from the Christmas and New Year festive season.

Ciputra Development (CTRA)

CTRA is included in the BUY list with a target price of Rp1,570, indicating an upside of 22.7%. The company is expected to continue strong marketing sales and net profit after tax (NPAT) in 3Q24.

Jasa Marga (JSMR)

JSMR is included in the BUY list with a target price of Rp6,000, reflecting an upside of 25.5%. The company is expected to benefit from major tariff increases in 2025.

Cisarua Mountain Dairy (CMRY)

CMRY is included in the BUY list with a target price of Rp6,000, indicating an upside of 8.1%. The company is expected to see a 25.6% rise in net income in 2024.

Astra International (ASII)

ASII is included in the BUY list with a target price of Rp5,800, reflecting an upside of 14.3%. The company’s 70% of car and motorcycle unit sales are financed.

Trimegah Bangun Persada (NCKL)

NCKL is included in the BUY list with a target price of Rp1,430, indicating an upside of 61.6%. The company is expected to benefit from additional 121,000 tonnes of nickel pig iron (NPI) and appreciation in nickel prices.

Malaysia Market Overview

Alpha Picks: Gearing Up For The Reporting Season

Our Alpha Picks outperformed the FBMKLCI in October 2024 (-0.5% vs -2.9%). The equity market still lacks conviction, but our Alpha Picks are expected to outperform in November 2024, driven by expected winners in the upcoming reporting season, beneficiaries of dividends, and M&A activities.

EcoWorld (ECW)

ECW is included in the BUY list with a target price of RM2.10, reflecting an upside of 16.7%. The company is expected to benefit from a burgeoning industrial sector, aligning with Johor’s vision of becoming a regional economic powerhouse like Shenzhen.

Gamuda (GAM)

GAM is included in the BUY list with a target price of RM9.60, indicating an upside of 13.2%. The company has an exceptionally strong construction orderbook guidance going into FY25.

Lagenda Properties (LAGENDA)

LAGENDA is included in the BUY list with a target price of RM2.32, reflecting an upside of 73.1%. The company is a pure play affordable housing developer with the highest ROE of 17%. Stronger 2H24 earnings are anticipated.

My E.G. Services (MYEG)

MYEG is included in the BUY list with a target price of RM1.42, indicating an upside of 69.0%. The company is expected to benefit from anticipated launches of AI/blockchain initiatives and digital ID services.

Pekat Group (PEKAT)

PEKAT is included in the BUY list with a target price of RM1.15, reflecting an upside of 29.2%. The company is set to capitalize on the long-term structural growth in solar energy demand, with M&As fueling growth.

RGB International (RGB)

RGB is included in the BUY list with a target price of RM0.66, indicating an upside of 78.4%. The company is expected to benefit from potential upside to 3Q24 dividends and an exceptionally strong 4Q24.

RHB Bank (RHBBANK)

RHBBANK is included in the BUY list with a target price of RM6.80, reflecting an upside of 6.4%. The bank is expected to benefit from lower-than-expected credit costs and stronger-than-expected non-interest income.

Top Glove (TOPG)

TOPG is included in the BUY list with a target price of RM1.31, indicating an upside of 22.4%. The company is anticipated to see an earnings turnaround as industry operating matrices improve following better sales demand and margin expansion.

VS Industry (VSI)

VSI is included in the BUY list with a target price of RM1.42, reflecting an upside of 37.9%. The company is expected to see strong earnings in FY25 driven by vertical integration and additional impetus from its Philippines venture.

Yinson (YNS)

YNS is included in the BUY list with a target price of RM3.90, indicating an upside of 44.4%. The company is expected to benefit from plans for a pre-IPO and US IPO by 2026, charter of two Brazil FPSOs, and stake sale of Anna Nery.

Thailand Market Overview

Advanced Info Service (ADVANC)

ADVANC is included in the BUY list with a target price of Bt310.00. The company reported 3Q24 net profit of Bt8.8b, which was in line with our and consensus estimates. ADVANC is expected to see further growth in 4Q24, driven by the high season and government stimulus initiatives.

Far East Hospitality Trust (FEHT)

FEHT is included in the BUY list with a target price of S\$0.82. The company reported healthy seasonal strength driven by Chinese tourists in 3Q24.

VSTECS (VST MK)

VST is included in the BUY list with a target price of RM5.02. The company is expected to benefit from the rollout of new data centre incentives, potentially supercharging its growth by unlocking its total addressable market (TAM).