20170721-大华继显-Regional_Morning_Notes_41页_2mb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides a summary of market updates and company performance for various regions, including China, Indonesia, Malaysia, and Singapore, as well as Thailand. It includes earnings previews, stock analysis, corporate events, and key financial metrics for selected companies, particularly focusing on CSPC Pharmaceutical Group and Xtep International Holdings.

Main Points and Key Information

China

CSPC Pharmaceutical Group (1093 HK)
- 1H17 Results Preview: Expected upbeat performance due to strong sales momentum in the NBP series and growth in the vitamin C, generic drug, and oncology segments.
- NBP Series Growth: Projected to grow by 35% and 30% yoy in 2017 and 2018, respectively, driven by tender wins and market share gains.
- Oncology Segment: Sales growth is expected to be strong, with 40% and 100% yoy growth in 2017 and 2018 respectively.
- Vitamin C Segment: EBIT margin increased due to price hikes, with an average ex-factory price of US$5.0/kg in 1H17 compared to US$3.1/kg in 1H16.
- Valuation: Maintained BUY rating with a target price of HK$15.24, representing a 29.2% upside from the current price of HK$11.80.
- Financial Metrics:
  - EBITDA margin is expected to rise from 26.2% in 2016 to 27.6% in 2019.
  - Net margin is projected to increase from 17.0% in 2016 to 20.5% in 2019.
  - ROE is forecasted to increase to 25.2% in 2017 and 25.8% in 2018.
  - Operating profit and net profit are expected to grow significantly in 2017-2019.

Indonesia

Poultry Sector: Expected lower yoy earnings in 2H17 despite government support.

Malaysia

British American Tobacco (ROTH MK): 2Q17 results were above expectations, driven by a qoq sales recovery and margin improvement from restructuring. Upgraded to HOLD.
Maxis (MAXIS MK): 2Q17 core net profit grew 14% yoy due to postpaid dominance and prepaid ARPU uplift. Maintain HOLD.
Syarikat Takaful (STMB MK): Results in line with expectations, supported by strong claims experience and investment income growth. BUY rating.
Westports Holdings (WPRTS MK): Results in line with expectations, with a rebound in gateway offsetting losses in transhipment. Huge tax boost expected in 2H17, but earnings prospects for 2018 remain unclear. HOLD rating.
VS Industry (VSI MK): Proposes a 1-for-4 rights issue to support expansion plans for large projects in 2018. BUY rating.

Singapore

Ascott Residence Trust (ART SP): Active asset recycling is underway. HOLD rating.
Keppel Corporation (KEP SP): Earnings below expectations, but Keppel Capital is expected to drive future growth. HOLD rating.

Thailand

Oil & Gas Sector: Focus remains on refinery and petrochemical downstream plays, including IRPC, PTTGC, and TOP.
KasikornBank (KBANK TB): Core operating income growth was decent, but net profit declined 5% yoy due to higher provisions. BUY rating.
Krung Thai Bank (KTB TB): Earnings plunged 63% yoy due to a 79% surge in provisions. BUY rating.

Key Indices

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	21611.8	-0.1	0.3	0.9	9.4
S&P 500	2473.5	-0.0	1.0	1.6	10.5
FTSE 100	7487.9	0.8	1.0	0.5	4.8
AS30	5805.7	0.5	0.5	1.8	1.5
CSI 300	3747.9	0.5	1.7	4.5	13.2
FSSTI	3293.1	-1.0	1.8	2.9	14.3
HSCEI	10846.8	-0.1	1.6	4.4	15.5
HSI	26740.2	0.3	1.5	4.1	21.5
JCI	5825.2	0.3	-0.1	0.1	10.0
KLCI	1755.6	-0.1	0.1	-1.1	6.9
KOSPI	2441.8	0.5	1.3	3.6	20.5
Nikkei 225	20144.6	0.6	0.2	0.0	5.4
SET	1575.3	-0.0	-0.3	-0.1	2.1
TWSE	10499.4	-0.1	0.4	1.4	13.5
BDI	948	1.7	6.8	11.9	-1.4
CPO (RM/mt)	2582	-0.8	-2.9	-3.9	-19.3
Brent Crude	49	-0.8	1.8	7.1	-13.2

Top Picks

Company	Ticker	Current Price	Target Price	Potential Upside (%)
Alibaba	BABA US	152.11	173.00	13.7
Beijing Ent. Water	371 HK	6.50	7.60	16.9
Ace Hardware	ACES IJ	1,145.00	1,300.00	13.5
Waskita Kanya	WSKT IJ	2,190.00	3,350.00	53.0
V.S. Industv	VSI MK	2.05	2.40	17.1
OCBC	OCBC SP	11.05	13.00	17.6
Siam Cement	SCC TB	-	600.00	19.0

Key Assumptions

Country/Region	2016 GDP % yoy	2017F GDP % yoy	2018F GDP % yoy
US	1.6	2.5	2.5
Euro Zone	1.7	1.8	1.6
Japan	1.0	0.9	1.2
Singapore	2.0	2.4	2.5
Malaysia	4.2	5.0	4.9
Thailand	3.2	3.3	3.3
Indonesia	5.0	5.2	5.5
Hong Kong	1.9	2.0	2.0
China	6.7	6.6	6.3
Brent (Average)	-	45	55
CPO (RM/mt)	-	2,653	2,600

Corporate Events

Event	Venue	Start Date	End Date
Analyst Marketing on Singapore Small & Mid Caps	Taipei	19 Jul	21 Jul
Roadshow with Jacobson Pharma	Shanghai	28 Jul	28 Jul
Visit to Sarawak Corridor of Renewable Energy	Sarawak	1 Aug	3 Aug
Lunch with Singapore Post	Singapore	4 Aug	4 Aug
Analyst Marketing on Singapore Small & Mid Caps	Malaysia	14 Aug	15 Aug
Analyst Marketing on Greater China Strategy	Singapore	16 Aug	16 Aug
Analyst Marketing on Greater China Strategy	Malaysia	17 Aug	18 Aug
Roadshow with Globetronics Technology	Taipei	22 Aug	23 Aug
Analyst Marketing on Semiconductor	Taipei	24 Aug	25 Aug
Roadshow with Top Glove Corporation	US/Canada	5 Sep	12 Sep
Roadshow with Singapore Technologies Engineering Ltd	Canada	9 Oct	11 Oct
Asian Gems Conference 2017	Singapore	10 Oct	11 Oct

Summary of Key Financials and Valuation

CSPC Pharmaceutical Group:
- Earnings and profit are expected to grow significantly in 2017-2019.
- Valuation is based on 33x 2017F PE, representing 1.2x PEG for 2017 and 1.0x PEG for 2018.
- Net profit (adj.) is projected to grow from HK$2,101m in 2016 to HK$3,984m in 2019.
- Strong growth in oncology and generic drugs, with the NBP series expected to maintain high growth.
Xtep International Holdings (1368 HK):
- Expected to deliver weak 1H17 results due to a high base and additional provisions.
- Maintained BUY rating but revised target price to HK$3.70.
- A&P cost ratio is expected to rise to 11-13% in 2017, which may slightly affect 1H17 earnings growth.
- Better performance is anticipated in 2H17 and 2018 due to improved operations and a lower base compared to 2H16.