Banks - Aug 14 tracker – Early signs of recovery in loan growth?
Loan growth stuck at 8.6% yoy in Aug 14, on par with the level in Jul 14.
However, we are hopeful that loan growth would rebound in the coming
months, supported by the recovery in Aug 14’s leading loan indicators. Our
projected loan growth of 9-10% for 2014 is lower than the 10.6% in 2013.
Another concern would be margin contraction despite the rate hike. These
factors point to a rather gloomy outlook for banks. Hence, we continue to
Underweight the sector. Maybank stays our top pick.
Tomypak Holdings - New major shareholder
Not much is known about Tomypak’s new major shareholder, New Orient
Resources S/B, which is buying a 25.4% equity stake in the company for
RM1.30/share. However, we are disappointed that the selling price (which is its
current share price) is not at a premium given that it is for a controlling stake.
For now, we maintain our EPS forecasts and target price, based on an
unchanged 7.8x CY15 P/E, a 40% discount to Daibochi’s 13x 2015 P/E target,
while the stock remains a Reduce. Potential de-rating catalysts include a further
deterioration in EBITDA margins and weak domestic sales. For exposure to the
sector, we continue to prefer Daibochi.
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