Hong Leong Asia Ltd - Underperforming low expectations (CIMB)

UNDERPERFORM Maintained

S$1.70 Target: S$1.78

Mkt.Cap: S$636m/US$524m

Industrial Machinery

• Below; maintain Underperform. 2Q11 core net profit of S$19.1m (-41% yoy) was below our expectation and the Street’s, at 21% of our FY11 forecast. 1H11 accounts for 41% of our figure. The shortfall stemmed from a weaker-than-expected Xinfei performance which barely broke even. We cut our FY11-13 core EPS estimates by 19-22%, incorporating cuts in margins and unit sales across the units. We are now expecting a loss for Xinfei this year. Coupled with lower P/E targets for Yuchai and Xinfei on wider discounts and as their peers are de-rated, we reduce our SOP target price from S$2.74 to S$1.78. While its share price has pulled back to near Sep 09 levels, we see more downside, expecting de-rating catalysts from weaker-thanexpected earnings from Xinfei.

• Xinfei barely broke even. Even though 2Q is warmer and seasonally its strongest quarter, Xinfei was unable to engineer a major turnaround from two quarters of losses, barely breaking even this quarter. Unit sales and ASP increases severely lagged behind peers, with industry figures now ranking Xinfei No. 7 by sales in China, down from No. 4 in Jun 10. Margin compression was aggravated by poor control of raw-material costs. We are now expecting a full-year loss for the unit with the arrival of colder seasons.

• Yuchai weaker yoy. Yuchai’s profit fell 14% yoy despite 5% unit sales growth, as margins fell on the back of a shift in the product mix to lower-end engines and higher raw-material costs. Plagued by industry destocking, weak commercialvehicle sales and higher raw-material prices, sales growth could remain moderate.

• Moderate performance from Building Materials. Sales fell due to slower deliveries of precast concrete though gross profits benefited from improved margins on sales of ready-mix concrete. Karrimun Quarry has been sold for a gain of S$26m. We have reflected this as a non-core gain in our forecast for 2H11.

United Overseas Bank - Challenging environment ahead (OCBC)

Maintain HOLD

Previous Rating: HOLD

Current Price: S$18.80

Fair Value: S$19.30

2Q slightly above market expectations. UOB posted 2Q11 net earnings of S$636m, up 4.1% QoQ and 5.6% YoY, and slightly above Bloomberg analysts' poll of S$630m. Loans grew 7% QoQ and 24% YoY to S$128.5 billion. Growth in loans growth was broad-based and came mostly from businesses, with high QoQ growth rates from manufacturing and non-bank financial institutions at 11% each. Housing loans grew 20% YoY and 4% QoQ to S$36.6b.

Net interest income grew 3% YoY and 5% QoQ to S$913m. Net interest margin (NIM) saw a 2bp increase to 1.92% from 1Q11 - the only bank to see an improvement in NIM. Noninterest Income fell 5% QoQ to S$525m. Fee and Commission income improved 18% YoY and 2% QoQ to S$338m. As the group continues to build up its regional presence, costs remained high (up 13% YoY and 5% QoQ) and cost-to-income ratio moved up from 41% in 1Q11 to 42.6% in 2Q11. The group has declared an interim divided of 20 cents (same as last year) and this will be paid on 15 Sep 2011.

Healthy loan growth. Management is expecting loans growth to be in the high teens for this year. The higher margin for this quarter was due to its ability to focus on higher yielding assets, although challenging market conditions going forward could cap margin at current level or lower. In addition, as it continues to grow its regional businesses and increase productivity and risk management controls, cost-to-income ratio is likely to stay at current level or higher. Management also outlined that it is on track to tap on the growth in the wealth management business. It is aiming for 65-70 centres in the region by 2015, up from about 35 centres currently with asset under management of S$50b.

Maintain HOLD; cutting fair value estimate to S$19.30. With the current headwinds in the market and higher risks of further revisions in economic growth both in Singapore and for most of the key developed countries, we have revised down some of our assumptions and moderated our 2H11 forecasts, dropping our FY11 estimate from S$2665m to S$2433m. In addition, we have also lowered our FY12 estimates by 6.6% to S$2545m. As a result of the adjustments, we are lowering our fair value estimate from S$19.70 to S$19.30. We are maintaining our HOLD rating on UOB, but would turn buyers at S$18.20 or lower.

收租须呈报税务

租金收入与商业收入不同之处是，商人要非常积极进行商业活动才能赚钱，而屋主则只需等待租户把租金奉送上门。

套用税务俗语，租金是一项“守株待兔”的收获。

依据我国法律规定，从租金获取的盈利必须缴交税务，所有房东都应该掌握和了解过程与资讯。

依据我国法律规定，政府可通过个人或公司，征收租金盈余的税务，其间差别在于租赁产业是以公司经营或以个人投资。

个人投资或公司经营的税务处理各有利弊，如果个人收入不太高，依据个人所得税栏目计算，所要缴付的所得税利率则会比公司税务低。

而以公司名义投资，则可享有相当优惠。

这包括了累积亏损可抵销其他盈利、并可把亏损抵销盈利的便利推延到第二年、一般的经营、管理费与维修费等也可当作业务开销、还有成本优惠等也可列入投资开销之内。

可扣除维修费火险等

根据马来西亚1967年税务法令第4（d）条款阐明，租金收入须缴税。

不过屋主或纳税人在呈报时，可从租金收入扣除以下费用：

● 维修屋子费用

● 收租费用

● 火险与盗险保费

● 融资购屋贷款利息

● 寻找新租户取代旧租户费用，如介绍人佣金等等

● 地税、门牌税

然而，一些重建或扩建费用则不能用以扣除税务，而且一间房子在还未出租前，所消耗的费用都不能够扣税，因为这仅能当作资本开销。

不过，一旦租赁开始，以上的费用都用作经营开销，包括租期届满后房子空置期间所花费的开销。

租金纳为商业收入，纳税人享有什么好处？

如果出租开销高过租金收入，已形成亏损，屋主可以此亏损抵销其他收入；假设亏损的数额还是高于其他收入，那么抵销后的剩余可以带到下一年。

若租金收入并非纳为商业收入，屋主是不允以亏损来抵销其他收入，导致这项亏损平白流失而去。

屋主可以享有资本优惠；譬如屋主把家具、电器等连同物业一起出租，他可以购买这些物件的开销算在优惠内，以抵销租金收入，而抵销的剩余数额可带到下一年。

若租金并非纳为商业收入，屋主无法享受资本优惠。

目前，内陆税收局只允许屋主以购买新家居设备来取代旧设备的开销用来扣税。

然而，若你的公司纯粹以投资房产为业，一切有关的公司开销可以扣税，而公司秘书、会计等费用则也可用25%来抵销税务。

如何把租金收入转为商业收入？

屋主出租物业之外，若还提供其他的附加服务，则可把租金连同服务一概当作商业收入。

这些服务包括

● 保安人员

● 个别或中央系统冷气

● 升降机

● 康乐设施（俱乐部、健身中心、网球、羽毛球场、壁球场、泳池等等）

● 清洁工作

● 维修（共用设备、花园、户外灯饰、户外设施等等）

以上设施必须是由屋主本身完全提供，因而这类物业一般是大型别墅或私人公寓。

如果所租物业属于大型公寓，而所有设备皆由公寓管理层提供，则不能列为商业收入。

可是，如果业主拥有一栋商业大厦出租给来自各方的租户，附带提供各类服务，诸如保安人员、冷气、升降机、茶餐厅等等。

这些服务不一定仅是业主提供，但却由业主负责管理或协调，如此一来，租金和服务费收入则可当作商业收入。

http://www.nanyang.com.my/node/375968?tid=691