Ideas Troika 15 Jul 2015

Regional Daily, 15 July 2015
Regional Daily
Ideas Troika
Top Stories
CapitaLand Mall Trust (CT SP)
Property - REITS
BUY SGD2.16 TP: SGD2.42
Mkt Cap : USD5,524m
Pg2
CMTs acquisition of Bedok Mall from its sponsor would benefit unitholders
as it would boost its DPU. Bedok Mall is a great asset and we think that the
REITs next acquisition may be Westgate. Maintain BUY, as we raise our
DDM-derived TP to SGD2.42.
Analyst: Ong Kian Lin (ong.kian.lin@rhbgroup.com)
SSI Group (SSI PM)

Consumer Cyclical - Retail
BUY PHP8.48 TP: PHP11.50
Mkt Cap : USD622m
Pg3
We initiate coverage on SSI with a BUY rating and TP of PHP11.50 (35%

upside), pegged to 25x FY16F. We believe SSI has a superior growth profile
vs its peers.
Analyst: James Koh (james.koh@rhbgroup.com)
China Mengniu Dairy (2319 HK)

Food & Beverage Products
BUY HKD37.60 TP: HKD52.30
Mkt Cap : USD9,513m
Pg4
Domestic raw milk prices fell 18% YoY in 1H15. As we expect Mengnius
milk cost to decrease by low single digit this year, we see upside risks to
earnings forecasts. Mengniu is attractively valued at 17.5x forward 12M P/E,
or -1.4SD below the historical mean. Maintain BUY, TP HKD52.30.
Analyst: Robin Yuen, CFA (robin.yuen@rhbgroup.com)
Pg5
Business As Usual Amid Challenging Conditions
Other Key Stories

Malaysia
AMMB (AMM MK)
Banks
NEUTRAL MYR5.75 TP: MYR5.70
Tasco (TASCO MK)
Transport - Logistics
BUY MYR3.80 TP: MYR4.76
Singapore
Property - REITS
CapitaLand (CAPL SP)
Property - Real Estate
Thailand
Dynasty Ceramic (DCC TB)
Building Materials
Trading Buy THB3.58 TP: THB4.10
See important disclosures at the end of this report
Analyst: David Chong, CFA (david.chong@rhbgroup.com)

Pg6
Announces Share Split

Analyst: Ahmad Maghfur Usman (ahmad.maghfur.usman@rhbgroup.com)
Pg7
Funan DigitaLife Mall On The Market

Pg8
Bedok Mall Injection To Boost ROE

Pg9
Stronger Earnings Growth Expected For 2Q15

Analyst: Chatree Srismaicharoen (chatree.sr@rhbgroup.com)
Powered by EFATM Platform
Company Update, 15 July 2015
Buy (Maintained)
Property - REITS
Market Cap: USD5,524m
Target Price:
Price:
SGD2.42
SGD2.16
Macro
Risks
Acquires Another Key Asset
Growth
Value
CapitaMall Trust (CT SP)

Price Close
Relative to Straits Times Index (RHS)
2.30
113
2.25
111
2.20
109
2.15
108
2.10
106
2.05
104
2.00
102
1.95
100
1.90
99
1.85
97
1.80
30
95
25
0
0
.
2
0
0
CMTs acquisition of Bedok Mall from its sponsor would benefit .
0
unitholders as it would boost its DPU. Maintain BUY, as we raise our 0
DDM-derived TP to SGD2.42 (12% upside, from SGD2.40). We believe 0
Bedok Mall is a great asset as it is the only prime mall within the highlypopulated area. We also believe that the REITs next acquisition may
most likely be Westgate.
20
15
May-15
Mar-15
Jan-15
Nov-14
Sep-14
5
Jul-14
Vol m
10
Source: Bloomberg
Avg Turnover (SGD/USD)

Cons. Upside (%)
Upside (%)
52-wk Price low/high (SGD)
Free float (%)
Share outstanding (m)
Shareholders (%)
16.7m/12.5m
2.8
12.0
1.90 - 2.27
65
3,464
Capitaland Limited
Nomura Asset Management
NTUC Enterprise
28.0
7.7
5.7
.
2
0
.
2
New revenue stream in Bedok Mall. CapitaLand Mall Trust (CMT) has
announced an asset injection from its sponsor, CapitaLand (CAPL SP,
BUY, TP: SGD4.22), and will acquire Bedok Mall for SGD780.0m, which
is equivalent to SGD3,506 psf. The property yield for the mall is
approximately 5.1%, while the mall maintains a high occupancy rate of
99.3% as of 31 Dec 2014.
Bedok Mall is the crown jewel. Given that the asset is located within
the most populated area of Singapore, we view its price as reasonable.
In addition, Bedok Mall enjoys high traffic flow of an average of 1.4m
shoppers every month, as it is the only prime mall within the region. We
like the acquisition as it adds to the resilience of the REITs portfolio, and
is unaffected by the currently sluggish tourism industry.
Gearing levels still healthy. The injection of the mall will be mainly
funded by debt (79.0%), while 72m units will be issued to the sponsor
(CapitaLand) to fund the remaining portion of the acquisition. Upon
taking on SGD632.4m of debt, its gearing level would still be in the
healthy range as it increases to 37.2% from 33.8%.
Any more acquisitions in the pipeline? We believe that the remaining
70% stake of Westgate held by CapitaLand could potentially be next in
line to be acquired by the REIT. At current market valuations, CMT would
require a sum of 765.8m to acquire the remaining stake of Westgate. As
its gearing level is close to 40%, we believe it is more likely for the REIT
to divest one of its assets for cash.
TP rises to SGD2.42, maintain BUY. We raise our DDM-based TP to
SGD2.42 from SGD2.40, as we increase our FY16 and FY17 DPU
forecasts by 1.6% and 1.4% respectively.
Share Performance (%)

YTD
1m
3m
6m
12m
Absolute
5.9
1.9
(4.4)
2.9
10.2
Relative
7.4
3.0
1.4
3.2
9.4
Shariah compliant
Forecasts and Valuations
Dec-13
Dec-14
Dec-15F
Dec-16F
Dec-17F
Total turnover (SGDm)
638
659
662
715
726
Net property income (SGDm)
439
448
457
497
505
Reported net profit (SGDm)
574
619
436
478
496
Total distributable income (SGDm)
367
412
367
400
417
0.10
0.11
0.11
0.11
0.12
DPS (SGD)
DPS growth (%)
8.9
5.3
(2.7)
7.1
4.2
Ong Kian Lin +65 6232 3896
Recurring P/E (x)
13.0
12.1
17.2
15.8
15.4
ong.kian.lin@rhbgroup.com
P/B (x)
1.24
1.19
1.18
1.19
1.17
Dividend Yield (%)
4.8
5.0
4.9
5.2
5.5
Ivan Looi +65 6232 3841
Return on average equity (%)
9.8
10.1
6.9
7.5
7.7
ivan.looi@rhbgroup.com
Return on average assets (%)
6.0
6.5
4.3
4.5
4.6
3.71
3.53
2.74
2.99
3.04
0.0
0.0
0.0
Interest coverage ratio (x)

Our vs consensus EPS (adjusted) (%)
Source: Company data, RHB
Initiating Coverage, 14 July 2015
SSI Group (SSI PM)
Buy
Consumer Cyclical - Retail

Market Cap: USD622m
Target Price:
Price:
PHP11.50
PHP8.48
Macro
Risks
Put This In Your Shopping Bag
Growth
Value
SSI Group (SSI PM)

Relative to Philippines Stock Exchange PSEi (RHS)
11.6
155
11.1
148
10.6
142
10.1
135
9.6
128
9.1
122
8.6
115
8.1
108
7.6
102
7.1
180
160
140
120
100
80
60
40
20
95
Jun-15
Apr-15
Mar-15
Feb-15
Dec-14
Source: Bloomberg
Avg Turnover (PHP/USD)

Cons. Upside (%)
Upside (%)
52-wk Price low/high (PHP)
Free float (%)
Shareholders (%)
48.0m/1.07m
41.5
35.6
7.50 - 11.3
30
3,313
14.1
13.1
13.1
Marjorisca Inc.
Bird's Eye View Inc.
From Herms to Zara... SSI is the biggest specialty retailer in the

Philippines by far, and manages an excellent portfolio of international
brands for mid-high end consumers. As the tenant of choice, it has a
unique bargaining position with mall operators and is the preferred
partner of new brand principals seeking entry into the fast-growing
Philippines retail market. Growth over the next two to three years will be
underpinned by an estimated 40% increase in its retail space, in malls
that are already identified.
and hotdogs too. SSI has an effective 30% stake in Philippines
FamilyMart, where it is also running the operations. We believe the
convenience retail segment is under-penetrated in the country, with
annual spending per population of USD4 vs USD125 in Thailand. 7Eleven is the clear leader in this category, but FamilyMart is already
establishing itself as a substantial Top 3 player in the Philippines.
Store metrics suggest long growth runway. Compared to other major
ASEAN cities, retail space/ capita is still relatively low in Metro Manila. In
our bottoms-up comparison with its most similar peer, Mitra Adiperkasa
(MAPI IJ, HOLD, TP: IDR5,575) in Indonesia, we estimate SSIs
revenue/ sqm is 79% higher, while operating cost is lower. These
suggest that near- to medium-term risk of revenue cannibalization from
SSIs expansion plan is still relatively benign.
Initiate with BUY. We expect revenue growth to be sustained at a high
level at least till 2017F, with a 2-year net profit CAGR of 26% during this
period. Our TP of PHP11.50 is pegged to 25x FY16F P/E, implying 1x
PEG. The key risk for the stock is inventory management, and poor
execution could lead to discounting and margin dilution.

Dec-13
Dec-14
Dec-15F
Dec-16F
Dec-17F
Total turnover (PHPm)
12,788
15,213
18,357
21,571
24,862
Reported net profit (PHPm)
614
998
1,225
1,533
1,943
Recurring net profit (PHPm)
614
998
1,225
1,533
1,943
Recurring net profit growth (%)
32.8
62.7
22.7
25.1
26.8
Recurring EPS (PHP)
0.19
0.30
0.37
0.46
0.59
DPS (PHP)
0.00
0.00
0.00
0.09
0.12
James Koh +65 6232 3839
Recurring P/E (x)
45.8
28.1
22.9
18.3
14.5
james.koh@rhbgroup.com
P/B (x)
10.2
3.2
2.8
2.5
2.2
15.2
11.3
6.3
1.4
YTD
1m
3m
6m
Absolute
(14.4)
(13.1)
(14.4)
(22.9)
Relative
(18.7)
(13.6)
(8.0)
(23.5)
12m
Shariah compliant
P/CF (x)
Dividend Yield (%)
na
na
0.0
0.0
0.0
1.1
EV/EBITDA (x)
20.4
10.4
7.7
6.7
5.5
44.4
17.2
12.9
14.3
16.1
143.1
32.6
Net debt to equity (%)

38.2
32.0
9.0
(3.5)
(3.8)
(1.4)
.
2
0
.
2
0
0
.
2
0
0
We initiate coverage on SSI with a BUY rating and TP of PHP11.50 (36% .
0
upside), pegged to 25x FY16F P/E. SSI is an excellent proxy to 0
discretionary consumer spending in the Philippines, a growth market 0
with favorable macroeconomics and demographic conditions. We
believe SSI has a superior growth profile vs its peers and expect the
stock re-rate upwards as it executes on its growth plans going forward.
Nov-14
Vol m
Price Close
Buy (Maintained)
Consumer Non-cyclical - Food & Beverage Products

Target Price:
Price:
HKD52.30
HKD37.60
Macro
Risks
Raw Milk Input Cost Falls To Record Low
Growth
Value

Price Close
Relative to Hang Seng Index (RHS)
50
109
45
102
40
95
35
88
30
81
25
25
74
15
May-15
Mar-15
Jan-15
Sep-14
Nov-14
5
Jul-14
Vol m
10
Source: Bloomberg
Avg Turnover (HKD/USD)

Cons. Upside (%)
Upside (%)
52-wk Price low/high (HKD)
Free float (%)
Shareholders (%)
227m/29.6m
-0.5
39.1
27.6 - 45.2
68
1,961
COFCO
Prominent Achiever
Commonwealth Bank of
Australia
23.9
7.6
6.0

YTD
1m
3m
6m
Absolute
17.5
(9.0)
(10.6)
11.7
12m
0.9
Relative
10.6
(1.5)
(2.1)
7.1
(7.1)
Shariah compliant
Robin Yuen, CFA +852 2103 9202

robin.yuen@rhbgroup.com
Oversupply of New Zealand milk powder. Global dairy prices are at an

all-time low (New Zealand milk powder futures have plunged by -62%
since hitting a peak in 2014, according to Bloomberg), due to the slump
in demand from major importers including China. New Zealand industry
analysts believe prices are unlikely to recover as available stock
increases. We believe that China raw milk prices are likely to fall further.
Key input price deflation. Benchmark China raw milk prices have
dropped 18% YoY to CNY3.4/litre in 1H15, according to the Ministry of
Agriculture. Our estimates indicate that China Mengniu Dairys
(Mengniu) raw milk procurement price would be down only 5-10% due to
its stringent requirements for higher quality raw milk, in line with its
managements guidance. Nonetheless, its GPM would be positive.
Sensitivity to raw milk prices. In our earlier initiation report (link), since
raw milk is c.45% of COGS, we calculated that a 1% dip in raw milk
costs (cost savings not passed on) leads to a 5% rise in net profit, ceteris
paribus. However, a scenario of cheaper raw milk from weak demand
and oversupply is usually accompanied by sales promotions (implying
GPM pressure), so there would be less actual GPM enhancement.
Attractive entry point. Valuations are at an all-time low, due to volatility
in the HK market. Mengniu is trading at a 17.5x 12-month forward P/E,
1.4SD below its 21.7x historical mean. We believe this is an opportune
time to accumulate quality stocks that are also attractively valued.
Maintain BUY. We like Mengniu's growth and earnings visibility, as well
as the potential GPM upside from cheaper input prices. For now, we
keep our forecasts and TP at HKD52.30, implying 27x FY15F P/E (2SD
above its mean P/E). Mengniu is trading at a 19.5x FY15F P/E vs the
22x peer average, despite its higher 3-year EPS CAGR of 24% vs the
sectors 21% CAGR.
Dec-13
Dec-14
Dec-15F
Dec-16F
Dec-17F
Total turnover (CNYm)
43,357
50,049
56,030
63,035
71,148
Reported net profit (CNYm)
1,631
2,351
3,007
3,688
4,508
Recurring net profit (CNYm)
1,611
2,351
3,007
3,688
4,508
23.6
46.0
27.9
22.6
22.2
Recurring EPS (CNY)
0.89
1.21
1.55
1.90
2.32
DPS (CNY)
0.20
0.28
0.36
0.44
0.54
Recurring P/E (x)
33.7
24.9
19.5
15.9
13.0
P/B (x)
3.54
2.72
2.45
2.19
1.93
P/CF (x)
16.6
19.0
8.9
10.2
8.7
0.7
0.9
1.2
1.5
1.8
EV/EBITDA (x)
18.4
15.1
11.3
9.4
7.6
11.7
12.8
13.3
14.6
15.8
22.9
20.6
19.3
10.6
1.3
10.8
16.1
15.2
Dividend Yield (%)
.
2
0
.
3
0
0
.
2
0
0
Domestic raw milk prices fell 18% YoY in 1H15 from weak demand and .
0
oversupply. As we expect milk prices to decrease by low single digits 0
this year, we see upside risks to our GPM and earnings forecasts. 0
Maintain BUY, and a TP of HKD52.30 (39% upside). As Mengniu is
trading at a 17.5x forward 12-month P/E, or -1.4SD from its historical 5year P/E mean, we believe that it is attractively valued.
20
AMMB (AMM MK)
Neutral (from Sell)
Financial Services - Banks

Target Price:
Price:
MYR5.70
MYR5.75
Macro
Risks
Business As Usual Amid Challenging Conditions
Growth
Value
AMMB (AMM MK)

Relative to FTSE Bursa Malaysia KLCI Index (RHS)
6.6
95
6.1
91
5.6
87
5.1
16
14
12
10
8
6
4
2
83
Jan-15
0
0
.
2
0
0
We are upgrading our call to NEUTRAL on valuation grounds, with the .
0
same MYR5.70 TP (1% downside). In response to recent media reports, 0
AMMB said it was not aware of any investigations by the regulator on 0
the group itself. It is still business as usual and the recent reports have
not resulted in any unusual deposit outflows. Macroeconomic
conditions remain challenging, but are largely in line with expectations.
May-15
99
Mar-15
7.1
Nov-14
103
Sep-14
7.6
Jul-14
Vol m
Price Close
Source: Bloomberg
Avg Turnover (MYR/USD)

Cons. Upside (%)
Upside (%)
52-wk Price low/high (MYR)
Free float (%)
Shareholders (%)
16.1m/4.36m
8.3
-0.9
5.35 - 7.18
47
3,014
ANZ Bank
Employees Provident Fund
Amcorp Group
23.8
16.4
13.0

YTD
1m
3m
6m
12m
Absolute
(12.9)
(7.3)
(10.0)
(10.9)
(19.5)
Relative
(10.3)
(6.2)
(3.2)
(9.0)
(10.6)
Shariah compliant
.
2
0
.
1
Not aware of any investigations. AMMB held a teleconference

yesterday to clarify on recent media reports involving the group.
Management said that it was not aware of any investigations carried out
by the regulator on the group itself or any broader impact (eg licensing
issues). AMMB added that it is still business as usual and the reports
have not resulted in any unusual deposit outflows.
Operating environment still challenging. This is on the back of factors
such as slowing economic growth, weaker consumer sentiment post the
implementation of the goods and services tax (GST), and corporates
taking a wait-and-see stance due to the uncertain environment. AMMB
believes the reaction has been more pronounced for higher leveragedhouseholds post-GST. Due to the tough environment, AMMB remains
vigilant on asset quality, but highlighted that industry numbers appear to
be holding up. On the deposit front, management still sees the usual
seasonal deposit campaigns taking place but thinks competition has
stabilised since the liquidity coverage ratio (LCR) requirements came
into effect last month. On the whole, AMMB said the challenging
environment is largely within expectations and the groups operations are
tracking its KPIs.
Search for new CEO still ongoing. AMMB is in the process of
narrowing down the list of suitable candidates for the CEO position.
Not aware of any stake sale plans by ANZ. Finally, management said
that it was not aware of any plans underway by ANZ to dispose of its
stake in AMMB.
Forecasts and investment case. No changes to our earnings forecasts.
We retain our GGM-based TP of MYR5.70. We expect AMMBs ongoing
rebalancing of its loan portfolio to keep bottomline growth relatively
lacklustre in the near term, but this should be a positive for asset quality
in the mid and longer term. Following the recent share price correction,
AMMB currently trades at FY16F P/E and P/BV of 10.4x and 1.13x
respectively. Valuations appear fair at current levels, in our view. Hence,
we upgrade our recommendation to NEUTRAL from Sell.
Mar-14
Mar-15
Mar-16F
Mar-17F
Mar-18F
Reported net profit (MYRm)
1,782
1,919
1,670
1,794
1,899
10.0
7.6
(13.0)
7.4
5.8
1,782
1,919
1,670
1,794
1,899
Recurring EPS (MYR)
0.59
0.64
0.56
0.60
0.63
BVPS (MYR)
4.36
4.79
5.07
5.42
5.79
DPS (MYR)
0.24
0.27
0.25
0.26
0.27
9.7
9.0
10.4
9.6
9.1
1.32
1.20
1.13
1.06
0.99
Net profit growth (%)

Recurring net profit (MYRm)
Recurring P/E (x)

P/B (x)
David Chong, CFA +603 9207 7618
Dividend Yield (%)
4.2
4.7
4.3
4.5
4.7
david.chong@rhbgroup.com
14.1
13.9
11.2
11.3
11.2
1.4
1.4
1.2
1.3
1.3
(1.6)
(1.5)
0.0
Tasco (TASCO MK)
Buy (Maintained)
Transport - Logistics
Market Cap: USD99.8m
Target Price:
Price:
MYR4.76
MYR3.80
Macro
Risks
Announces Share Split
Growth
Value
Tasco Malaysia (TASCO MK)

Relative to FTSE Bursa Malaysia KLCI Index (RHS)
3.7
151
3.2
131
2.7
111
2.2
800
700
600
500
400
300
200
100
91
Jan-15
0
0
.
2
0
0
TASCO announced a 1 into 2 share split, which bodes well for boosting .
0
trading volume as its ex-split price would be more affordable. Maintain 0
BUY, as we remain positive on its earnings outlook (we expect earnings 0
to grow 19% in FY16), with our MYR4.76 TP (25% upside) based on 13x
FY16 EPS. We expect TASCO to report marginally higher earnings YoY
and seasonally stronger growth QoQ for its 1QFY16 earnings.
May-15
171
Mar-15
4.2
Nov-14
191
Sep-14
4.7
Jul-14
Vol th
Price Close
Source: Bloomberg
Avg Turnover (MYR/USD)

Cons. Upside (%)
Upside (%)
52-wk Price low/high (MYR)
Free float (%)
Shareholders (%)
0.25m/0.07m
25.3
25.1
2.48 - 4.49
25
100.0
65.0
9.8
Nippon Yusen KK
Real Fortune Portfolio SB
Announces share split. TASCO announced a 1 into 2 share split

yesterday. This marks its first corporate exercise since it undertook an
IPO in Dec 2007 at MYR1.10. The stock has been very illiquid,
generating 73,300 traded shares on its daily volume over the past one
year. The share split would bode well for boosting trading volume on the
counter as the companys ex-split price would be more affordable.
Warehouse expansion to be earnings driver. We expect warehousing
to be the key topline driver in attracting new contracts, which should spur
revenue contribution for haulage and other segments. We understand
TASCO is aggressively seeking new warehouse space and would also
refurbish its existing 1-floor headquarters into a multi-story warehouse
(+500,000 sq ft). MYR200m in total capex has been allocated for the
next three years for this and its fleet expansion, notably in Iskandar
Malaysia (200,000 sq ft) and Westports (500,000-600,000 sq ft). TASCO
could see warehouse space capacity potentially increasing by at least 2x
over the next three years. These expansions are to be done
progressively.
1Q16 results preview. The logistics operator reported earnings of
MYR10.0m/MYR5.7m in 1QFY15 (Mar)/4QFY15 respectively. TASCO is
scheduled to release its 1QFY16 results sometime in the earlier half of
next month and we expect it to report marginally higher earnings YoY
and seasonally stronger growth QoQ. Part of the increase in earnings is
likely to be attributed to the commencement of its new Tanjung Pelepas
Port warehouse in late Jan 2015, which we understand is already fully
utilised, coupled with new contract additions secured.
Maintain BUY. We remain positive on TASCOs earnings outlook and
expect net profit to grow by 19% in FY16. Our MYR4.76 TP is based on
13x FY16 EPS. Post the share split exercise, our TP should be adjusted
to MYR2.38. The exercise is expected to be completed sometime in
October-December.
YTD
1m
3m
6m
12m
Absolute
36.7
(8.9)
(2.6)
35.2
46.2
Relative
39.0
(8.1)
3.9
36.4
54.9
Total turnover (MYRm)
Shariah compliant
Mar-14
Mar-15
Mar-16F
Mar-17F
467
494
575
639
661
Reported net profit (MYRm)
26.0
30.7
36.6
42.1
43.7
Recurring net profit (MYRm)
26.5
30.7
36.6
42.1
43.7
0.0
16.0
19.1
15.2
3.8
Recurring EPS (MYR)
0.26
0.31
0.37
0.42
0.44
DPS (MYR)
0.09
0.09
0.11
0.13
0.13
Recurring P/E (x)
14.3
12.4
10.4
9.0
8.7
P/B (x)
1.37
1.27
1.17
1.07
0.99
P/CF (x)
6.99
8.14
7.03
6.16
5.61
2.4
2.4
2.9
3.3
3.5
6.61
6.42
5.21
4.69
4.43
10.6
11.7
12.4
11.8
1.6
1.8
0.6
0.0
0.0
0.0
Ahmad Maghfur Usman +603 9207 7654

ahmad.maghfur.usman@rhbgroup.com
Malaysia Research +603 9207 7607

research2@rhbgroup.com
Dividend Yield (%)

EV/EBITDA (x)
.
2
0
.
2
0.0
net cash
net cash
Mar-18F
Corporate News Flash, 15 July 2015
Buy (Maintained)
Property - REITS
Target Price:
Price:
SGD2.42
SGD2.16
Macro
Risks
Funan DigitaLife Mall On The Market
Growth
Value
CapitaMall Trust (CT SP)

Price Close
2.30
113
2.25
111
2.20
109
2.15
108
2.10
106
2.05
104
2.00
102
1.95
100
1.90
99
1.85
97
1.80
30
95
0
0
.
2
0
0
Our channel checks show that Funan may be on the market. It was last .
0
appraised at SGD361m (SGD1,209 psf on a NLA basis) as of 31 Dec 0
2014, at a 16% discount to our RNAV of SGD427m (SGD1,430 psf). We 0
think CMT may be exploring all options for Funan, as its previous
attempt in 2008 to redevelop the asset was shelved. Funan constitutes
only 4% of our FY15 RNAV and revenue. The divestment may not move
the needle much. Reiterate BUY and SGD2.42 TP (12% upside).
25
20
15
May-15
Mar-15
Jan-15
Nov-14
Sep-14
Jul-14
Vol m
10
Source: Bloomberg

Cons. Upside (%)
Upside (%)
Free float (%)
Shareholders (%)
16.7m/12.5m
2.8
12.0
1.90 - 2.27
65
3,464
Capitaland Limited
Nomura Asset Management
NTUC Enterprise
28.0
7.7
5.7

YTD
1m
3m
6m
12m
Absolute
5.9
1.9
(4.4)
2.9
10.2
Relative
7.4
3.0
1.4
3.2
9.4
Shariah compliant
Ong Kian Lin +65 6232 3896

.
2
0
.
2
Expression of interest for Funan DigitaLife Mall (Funan). We

understand that JLL is marketing Funan for sale by expression of interest
(EOI) presently. It is on an invitation basis only and the EOI purportedly
closes on 3 Aug. Funan was last valued by Knight Frank on 31 Dec 2014
at SGD361m (SGD1,209 psf). Funan is one of Singapores choice
destinations for information technology (IT), gaming digital and lifestyle
products and has 48.6% of its FY14 gross rental in the IT and electrical
and electronics trade sector. The mall sits on a site with a remaining land
tenure of 63 years.
Exploring all options. We think CapitaLand Mall Trust (CMT) could be
exploring all options for Funan, which registered a net property income
(NPI) yield of 6% in FY14. Our FY15 RNAV valuation pegs the asset at
SGD427m. Recall that its 163 strata units in the nearby Adelphi,
representing 55.1% of total share of the building, were previously
divested by CapitaLand (CAPL SP, BUY, TP: SGD4.20) to Guthurie at
SGD1,225 psf in 2010. Guthurie subsequently strata-sold some of the
floor plates at an average SGD2,051 psf, as recent as 2011. We expect
the selling price for Funan to be at least SGD390m-450m (SGD1,3061,540 psf), in order for a successful transaction to take place.
Our view. Funan constitutes only 4% of our FY15 RNAV and revenue.
As CMT previously purchased the mall for SGD191m in 2002, a
successful divestment may not move the needle much. However, we
think it may not be a bad move for CMT to unlock value from this asset
when property prices are still holding up. Its previous attempt in 20072008 to redevelop the mall was shelved due to the global financial crisis,
and the alternative may be to restart the initiative again. Nonetheless, we
find relief that CMT is actively sourcing for the best outcome for Funan,
The proceeds may in turn also help to finance the ongoing Bedok Mall
acquisition. Reiterate BUY with a TP of SGD2.42.
Dec-13
Dec-14
Dec-15F
Dec-16F
Dec-17F
638
659
662
715
726
Net property income (SGDm)
439
448
457
497
505
574
619
436
478
496
Total distributable income (SGDm)
367
412
367
400
417
0.10
0.11
0.11
0.11
0.12
DPS (SGD)
DPS growth (%)
8.9
5.3
(2.7)
7.1
4.2
Recurring P/E (x)
13.0
12.1
17.2
15.8
15.4
P/B (x)
1.24
1.19
1.18
1.19
1.17
Ivan Looi +65 6232 3841
Dividend Yield (%)
4.8
5.0
4.9
5.2
5.5
9.8
10.1
6.9
7.5
7.7
6.0
6.5
4.3
4.5
4.6
3.71
3.53
2.74
2.99
3.04
0.0
0.0
0.0
Interest coverage ratio (x)

Buy (Maintained)
Property - Real Estate

Target Price:
Price:
SGD4.22
SGD3.38
Macro
Risks
Bedok Mall Injection To Boost ROE
Growth
Value

3.6
105
3.4
102
3.2
99
3.0
95
2.8
50
45
40
35
30
25
20
15
10
5
92
Jan-15
0
0
.
2
0
0
CapitaLand is injecting Bedok Mall into CMT for SGD780m (SGD3,506 .
0
psf) and registering a capital gain of ~SGD30m. This translates to a 0
property yield of 5.1%. Reiterate BUY with a higher TP of SGD4.22 (25% 0
upside). We see the recent chain of divestments and private funds
foray as the companys robust recycling strategy to boost ROE and
steer towards an asset-light model.
May-15
109
Mar-15
3.8
Nov-14
112
Sep-14
4.0
Jul-14
Vol m
Price Close
Source: Bloomberg

Cons. Upside (%)
Upside (%)
Free float (%)
Shareholders (%)
39.3m/29.3m
18.0
25.0
2.94 - 3.79
60
4,268
Temasek Holdings Pte Ltd

Blackrock
Vanguard PLC
39.5
6.0
1.0

YTD
1m
3m
6m
12m
Absolute
2.1
(0.3)
(7.4)
5.3
4.3
Relative
3.6
0.8
(1.6)
5.6
3.5
.
2
0
.
2
Long-awaited injection into its REIT vehicle. CapitaLand has entered

into a S&P agreement with CapitaLand Mall Trust (CMT) (CT SP, BUY,
TP: SGD2.42) for the sale of the entire interest of Brilliance Mall Trust
(BMT), which owns Bedok Mall. This is based on an agreed value of
SGD780m for Bedok Mall and other net assets of BMT of SGD3.1m.
Hefty price tag of SGD783.1m. CapitaLand will receive from CMT
about SGD464m, including 72m new units in the latter. An existing bank
loan of SGD319.1m taken by Brillance Mall Trust will also be repaid. The
transaction is expected to be completed in 4Q15. According to
CapitaLand, this translates to a net capital gain of ~SGD30m on its
current book and ~SGD100m from the original development cost of
Bedok Mall. The property was valued at SGD718m as of 31 Dec 2014 at
a cap rate of 5.25%. This was increased to SGD775m as at 30 Jun
2015, at a higher cap rate of 5.1%. At this price, we believe CapitaLand
has made the right move to unlock value in Bedok Mall at this juncture,
while property prices are still holding up.
Consideration units take-up demonstrates shared interests. The
company will be issued 72m new CMT units as part of the sale
consideration, which will boost its deemed interest in CMT to 29.26%
from 27.71%. We view the issue of consideration units positively, as it
demonstrates the sponsors commitment to support the REITs strategy.
Full steam ahead to boost ROE. CapitaLands recent spate of
divestments, including serviced residences to ART (non-rated) and 30%
stake in PWC Building to DBS (DBS SP, BUY, TP: SGD23.30) are all
examples of its robust capital recycling strategy to realise development
profit and deploy capital into higher-yielding ventures, reaffirming
managements target and commitment to delivering a higher but
sustainable ROE of 8-12% (FY14: 7.1%). Reiterate BUY with a higher
RNAV-derived TP of SGD4.22 (previously SGD4.20).

Dec-13
Dec-14 Dec-15F Dec-16F Dec-17F
3,511
3,925
3,879
4,098
4,024
806
1,132
810
955
1,108
Recurring net profit (SGDm)
806
1,132
810
955
1,108
(13.3)
40.3
(28.4)
17.9
16.0
Recurring EPS (SGD)
0.19
0.27
0.19
0.22
0.26
Recurring P/E (x)
17.8
12.7
17.8
15.1
13.0
Ong Kian Lin +65 6232 3896
P/B (x)
0.89
0.86
0.83
0.80
0.76
5.2
6.9
4.8
5.4
6.0
1.9
2.5
1.9
2.3
2.7
39.4
57.0
41.6
27.0
25.9
Shariah compliant
Ivan Looi +65 6232 3841


Results Preview, 14 July 2015
Dynasty Ceramic (DCC TB)
Trading Buy (from Neutral)
Basic Materials - Building Materials

Market Cap: USD687m
Target Price:
Price:
THB4.10
THB3.58
Macro
Risks
Stronger Earnings Growth Expected For 2Q15
Growth
Value
Dynasty Ceramic PCL (DCC TB)

Price Close
Relative to Stock Exchange of Thailand Index (RHS)
4.3
118
4.2
115
4.1
112
4.0
109
3.9
106
3.8
103
3.7
100
3.6
97
3.5
94
3.4
91
3.3
35
88
25
20
15
May-15
Mar-15
Jan-15
Nov-14
Sep-14
Jul-14
Vol m
10
Source: Bloomberg
15.5m/0.47m
9.2
14.5
3.42 - 4.19
40
6,528
Roongroj Saengsastra
Wibul Watcharasurang
Maruth Saengsastra
24.5
8.6
7.4
Quarterly earnings to grow stronger YoY. We expect strong profit

margin to likely remain a key factor for Dynasty Ceramics (Dynasty)
2Q15 YoY earnings growth while core revenue would decline slightly
YoY. The reasons behind our expectations of 43.2% gross margin in
2Q15 are: i) a 30% decline in natural gas costs used for production, ii)
operating costs being closely monitored by experienced chairman
Roongroj Saengsastra, iii) average price increasing to THB138/sq m
(+1%YoY), and iv) lower fixed cost per unit as the utilisation rate was
increased to 80% in 2Q15 in order to replenish inventory after 1Qs peak
season. Therefore, net margin in 2Q15 is likely to improve to 20%, which
should result in net profit of THB364m (+14%YoY). We maintain our
strong growth outlook for 2H15s performance on: i) the low base effect
of 2H14s earnings, and ii) decreased energy costs to continue in 2H15.
Therefore, we expect FY15 earnings to return to a positive growth of
9%YoY and this should represent a short-term positive factor for
Dynasty.
Management optimistic on the business outlook. Mr Roongroj is
maintaining his expectations of stronger overall sales volume from 3Q15
onwards on positive growth observed in Thailands northern and northeastern regions since 1Q15. Therefore, Dynastys expansion plans, eg
five new retail outlets/year, two new gas-based kilns pre-ordered for
installation in FY16 and more, remains on track.
Upgrade to TRADING BUY. The stock looks more attractive in the short
term due to stronger quarterly earnings growth ahead, although we are
looking forward to an uptrend in ceramic tiles sales volume, which should
help enhance the long-term outlook. Post the share price correction of
11% over the past month, the stock now offers a 15% upside to our TP.
We upgrade our call to TRADING BUY with a DCF-based THB4.10 TP.
YTD
1m
3m
6m
12m
Absolute
1.4
(10.1)
(11.8)
1.4
(2.5)
Dec-12
Dec-13
Dec-14
Dec-15F
Dec-16F
Relative
1.9
(8.9)
(8.1)
4.3
(0.7)
Total turnover (THBm)
7,603
7,546
7,177
7,598
7,961
Reported net profit (THBm)
1,265
1,298
1,227
1,341
1,405
Recurring net profit (THBm)
1,265
1,298
1,227
1,341
1,405
1.8
2.6
(5.5)
9.3
4.8
Recurring EPS (THB)
0.31
0.32
0.30
0.25
0.22
DPS (THB)
0.31
0.32
0.30
0.24
0.22
Recurring P/E (x)
11.5
11.3
11.9
14.2
16.6
P/B (x)
5.29
5.39
5.29
7.74
7.71
P/CF (x)
12.7
9.8
10.3
9.8
13.5
Dividend Yield (%)
8.6
8.9
8.4
6.7
6.0
EV/EBITDA (x)
8.4
8.4
8.6
9.8
11.4
46.3
47.5
44.8
46.4
46.4
23.3
36.8
42.2
26.6
30.8
34.8
1.3
Shariah compliant
Chatree Srismaicharoen +662 862 9743

chatree.sr@rhbgroup.com
.
2
0
.
1
0
0
.
2
0
0
We expect stronger 2Q15 earnings growth given higher revenue .
0
contribution of high value-added ceramic tiles and low energy costs. 0
Upgrade to TRADING BUY, as the expected strong earnings rebound 0
should be a short-term catalyst, especially when the current share price
provides a 15% upside to our THB4.10 TP. We expect stronger sales
volume to be a longer-term stock price catalyst.
30
Avg Turnover (THB/USD)

Cons. Upside (%)
Upside (%)
52-wk Price low/high (THB)
Free float (%)
Shareholders (%)
RHB Guide to Investment Ratings

Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage
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other securities discussed herein must be placed with and through such other registered U.S. broker-dealer as appointed by RHB from time to time as
required by the Exchange Act Rule 15a-6.
This report is confidential and not intended for distribution to, or use by, persons other than the recipient and its employees, agents and advisors, as
applicable.
Additionally, where research is distributed via Electronic Service Provider, the analysts whose names appear in this report are not registered or qualified
as research analysts in the United States and are not associated persons of Auerbach Grayson AG or such other registered U.S. broker-dealer as
appointed by RHB from time to time and therefore may not be subject to any applicable restrictions under Financial Industry Regulatory Authority
(FINRA) rules on communications with a subject company, public appearances and personal trading.
Investing in any non-U.S. securities or related financial instruments discussed in this research report may present certain risks. The securities of non-U.S.
issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange Commission. Information on non-U.S. securities
or related financial instruments may be limited. Foreign companies may not be subject to audit and reporting standards and regulatory requirements
comparable to those in the United States.
The financial instruments discussed in this report may not be suitable for all investors.
Transactions in foreign markets may be subject to regulations that differ from or offer less protection than those in the United States.
OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST
Malaysia
RHB does not have qualified shareholding (1% or more) in the subject company (ies) covered in this report except for:
a)
RHB and/or its subsidiaries are not liquidity providers or market makers for the subject company (ies) covered in this report except for:
a)
RHB and/or its subsidiaries have not participated as a syndicate member in share offerings and/or bond issues in securities covered in this report in the
last 12 months except for:
a)
RHB has not provided investment banking services to the company/companies covered in this report in the last 12 months except for:
a)
Thailand
RHB OSK Securities (Thailand) PCL and/or its directors, officers, associates, connected parties and/or employees, may have, or have had, interests
and/or commitments in the securities in subject company(ies) mentioned in this report or any securities related thereto. Further, RHB OSK Securities
(Thailand) PCL may have, or have had, business relationships with the subject company(ies) mentioned in this report. As a result, investors should
exercise their own judgment carefully before making any investment decisions.
12
Indonesia
PT RHB OSK Securities Indonesia is not affiliated with the subject company(ies) covered in this report both directly or indirectly as per the definitions of
affiliation above.
Pursuant to the Capital Market Law (Law Number 8 Year 1995) and the supporting regulations thereof, what constitutes as affiliated parties are as follows:
1.
Familial relationship due to marriage or blood up to the second degree, both horizontally or vertically;
2.
Affiliation between parties to the employees, Directors or Commissioners of the parties concerned;
3.
Affiliation between 2 companies whereby one or more member of the Board of Directors or the Commissioners are the same;
4.
Affiliation between the Company and the parties, both directly or indirectly, controlling or being controlled by the Company;
5.
Affiliation between 2 companies which are controlled, directly or indirectly, by the same party; or
6.
Affiliation between the Company and the main Shareholders.
PT RHB OSK Securities Indonesia is not an insider as defined in the Capital Market Law and the information contained in this report is not considered as
insider information prohibited by law.
Insider means:
a. a commissioner, director or employee of an Issuer or Public Company;
b.
a substantial shareholder of an Issuer or Public Company;
c.
an individual, who because of his position or profession, or because of a business relationship with an Issuer or Public Company, has access to
inside information; and
d.
an individual who within the last six months was a Person defined in letters a, b or c, above.
Singapore
RHB Research Institute Singapore Pte Ltd and/or its subsidiaries and/or associated companies do not make a market in any securities covered in this
report, except for:
(a)
The staff of RHB Research Institute Singapore Pte Ltd and its subsidiaries and/or its associated companies do not serve on any board or trustee positions
of any issuer whose securities are covered in this report, except for:
(a)
RHB Research Institute Singapore Pte Ltd and/or its subsidiaries and/or its associated companies do not have and have not within the last 12 months had
any corporate finance advisory relationship with the issuer of the securities covered in this report or any other relationship (including a shareholding of 1%
or more in the securities covered in this report) that may create a potential conflict of interest, except for:
(a)
Hong Kong
RHBSHK or any of its group companies may have financial interests in in relation to an issuer or a new listing applicant (as the case may be) the securities
in respect of which are reviewed in the report, and such interests aggregate to an amount equal to or more than (a) 1% of the subject companys market
capitalization (in the case of an issuer as defined under paragraph 16 of the Code of Conduct for Persons Licensed by or Registered with the Securities
and Futures Commission (the Code of Conduct); and/or (b) an amount equal to or more than 1% of the subject companys issued share capital, or issued
units, as applicable (in the case of a new listing applicant as defined in the Code of Conduct). Further, the analysts named in this report or their associates
may have financial interests in relation to an issuer or a new listing applicant (as the case may be) in the securities which are reviewed in the report.
RHBSHK or any of its group companies may make a market in the securities covered by this report.
RHBSHK or any of its group companies may have analysts or their associates, individual(s) employed by or associated with RHBSHK or any of its group
companies serving as an officer of the company or any of the companies covered by this report.
RHBSHK or any of its group companies may have received compensation or a mandate for investment banking services to the company or any of the
companies covered by this report within the past 12 months.
Note: The reference to group companies above refers to a group company of RHBSHK that carries on a business in Hong Kong in (a) investment
banking; (b) proprietary trading or market making; or (c) agency broking, in relation to securities listed or traded on The Stock Exchange of Hong Kong
Limited.
13
Kuala Lumpur
Hong Kong
Singapore
RHB Research Institute Sdn Bhd

Level 11, Tower One, RHB Centre
Jalan Tun Razak
Kuala Lumpur
Malaysia
Tel : +(60) 3 9280 2185
Fax : +(60) 3 9284 8693
RHB OSK Securities Hong Kong Ltd.

th
12 Floor
World-Wide House
19 Des Voeux Road
Central, Hong Kong
Tel : +(852) 2525 1118
Fax : +(852) 2810 0908
RHB Research Institute Singapore

Pte Ltd (formerly known as DMG & Partners Research
Pte Ltd)
10 Collyer Quay
#09-08 Ocean Financial Centre
Singapore 049315
Tel : +(65) 6533 1818
Fax : +(65) 6532 6211
Jakarta
Shanghai
Phnom Penh
PT RHB OSK Securities Indonesia

Wisma Mulia, 20th Floor
Jl. Jend. Gatot Subroto No. 42
Jakarta 12710, Indonesia
Tel : +(6221) 2783 0888
Fax : +(6221) 2783 0777
RHB OSK (China) Investment Advisory Co. Ltd.

Suite 4005, CITIC Square
1168 Nanjing West Road
Shanghai 20041
China
Tel : +(8621) 6288 9611
Fax : +(8621) 6288 9633
RHB OSK Indochina Securities Limited

No. 1-3, Street 271
Sangkat Toeuk Thla, Khan Sen Sok
Phnom Penh
Cambodia
Tel: +(855) 23 969 161
Fax: +(855) 23 969 171
Bangkok
RHB OSK Securities (Thailand) PCL
10th Floor, Sathorn Square Office Tower
98, North Sathorn Road, Silom
Bangrak, Bangkok 10500
Thailand
Tel: +(66) 2 862 9999
Fax : +(66) 2 862 9799
DMG & Partners Research Guide to Investment Ratings

Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage
DISCLAIMERS
This research is issued by DMG & Partners Research Pte Ltd and it is for general distribution only. It does not have any regard to the specific investment
objectives, financial situation and particular needs of any specific recipient of this research report. You should independently evaluate particular
investments and consult an independent financial adviser before making any investments or entering into any transaction in relation to any securities or
investment instruments mentioned in this report.
The information contained herein has been obtained from sources we believed to be reliable but we do not make any representation or warranty nor
accept any responsibility or liability as to its accuracy, completeness or correctness. Opinions and views expressed in this report are subject to change
without notice.
This report does not constitute or form part of any offer or solicitation of any offer to buy or sell any securities.
DMG & Partners Research Pte Ltd is a wholly-owned subsidiary of DMG & Partners Securities Pte Ltd, a joint venture between OSK Investment Bank
Berhad, Malaysia which have since merged into RHB Investment Bank Berhad (the merged entity is referred to as RHBIB which in turn is a whollyowned subsidiary of RHB Capital Berhad) and Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group). DMG & Partners Securities
Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited.
DMG & Partners Securities Pte Ltd and their associates, directors, and/or employees may have positions in, and may effect transactions in the securities
covered in the report, and may also perform or seek to perform broking and other corporate finance related services for the corporations whose securities
are covered in the report. This report is therefore classified as a non-independent report.
As of Error! Bookmark not defined., DMG & Partners Securities Pte Ltd and its subsidiaries, including DMG & Partners Research Pte Ltd, do not have
proprietary positions in the subject companies, except for:
a) Error! Bookmark not defined.
As of Error! Bookmark not defined., none of the analysts who covered the stock in this report has an interest in the subject companies covered in this
report, except for:
a) Error! Bookmark not defined.
DMG & Partners Research Pte. Ltd. (Reg. No. 200808705N)
14

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Regional Daily, 15 July 2015

SSI Group (SSI PM)

We initiate coverage on SSI with a BUY rating and TP of PHP11.50 (35%

China Mengniu Dairy (2319 HK)

Business As Usual Amid Challenging Conditions

Other Key Stories

See important disclosures at the end of this report

Analyst: David Chong, CFA (david.chong@rhbgroup.com)

Announces Share Split

Funan DigitaLife Mall On The Market

Bedok Mall Injection To Boost ROE

Stronger Earnings Growth Expected For 2Q15

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Company Update, 15 July 2015

CapitaLand Mall Trust (CT SP)

Acquires Another Key Asset

CapitaMall Trust (CT SP)

Relative to Straits Times Index (RHS)

Avg Turnover (SGD/USD)

Share Performance (%)

Forecasts and Valuations

Total turnover (SGDm)

Net property income (SGDm)

Reported net profit (SGDm)

Total distributable income (SGDm)

Ong Kian Lin +65 6232 3896

Recurring P/E (x)

Dividend Yield (%)

Ivan Looi +65 6232 3841

Return on average equity (%)

Return on average assets (%)

Interest coverage ratio (x)

See important disclosures at the end of this report

Powered by EFATM Platform

Initiating Coverage, 14 July 2015

SSI Group (SSI PM)

Consumer Cyclical - Retail

Put This In Your Shopping Bag

SSI Group (SSI PM)

Avg Turnover (PHP/USD)

From Herms to Zara... SSI is the biggest specialty retailer in the

Share Performance (%)

Total turnover (PHPm)

Reported net profit (PHPm)

Recurring net profit (PHPm)

Recurring net profit growth (%)

Recurring EPS (PHP)

James Koh +65 6232 3839

Recurring P/E (x)

Return on average equity (%)

Net debt to equity (%)

Source: Company data, RHB

See important disclosures at the end of this report

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Company Update, 15 July 2015

China Mengniu Dairy (2319 HK)

Consumer Non-cyclical - Food & Beverage Products

Raw Milk Input Cost Falls To Record Low

China Mengniu Dairy (2319 HK)

Relative to Hang Seng Index (RHS)

Avg Turnover (HKD/USD)

Share Performance (%)

Robin Yuen, CFA +852 2103 9202

Oversupply of New Zealand milk powder. Global dairy prices are at an