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报告摘要
Regional Morning Notes Summary - 11 April 2014
Core Content
This document provides an overview of market trends and investment insights for the region, focusing on the palm oil and automobile sectors in Malaysia, Singapore, and China, along with key indices and corporate events.
Main Points
Palm Oil Sector (Malaysia)
- CPO Production: March 2014 saw a strong increase in palm oil production, with a 17.3% monthly growth and 13.0% year-on-year growth, surpassing expectations. Peninsular Malaysia had the strongest growth at 18.8%.
- Exports: Palm oil exports declined by 8.0% month-on-month and 19.1% year-on-year to 1.24m tonnes, mainly due to weak demand from key importers like China, Pakistan, and India.
- Inventory Levels: Malaysian palm oil inventory increased slightly to 1.69m tonnes, higher than the market expectation of 1.6m tonnes, but was partially offset by increased domestic consumption.
- Domestic Consumption: Rose by 66% year-on-year in March, driven by the B5 biodiesel blend and preparation for the fasting month and Hari Raya Puasa.
- El Nino Outlook: There is a 70% chance of El Nino developing in the southern hemisphere winter, which could reduce rainfall and lower CPO production in Malaysia and Indonesia, leading to higher prices.
- Sector Outlook: Overweight on the sector due to expected demand recovery in 2Q-3Q14 and supply constraints. Key top picks include Wilmar International, First Resources, Bumitama Agri, Golden Agri Resources, and Astra Agro Lestari.
- Key Catalysts: Supply shortfall, weather disruption, and domestic biodiesel demand are expected to drive price increases.
Automobile Sector (China)
- Passenger Vehicle Sales: March 2014 saw a 8% year-on-year growth, down from 12% in the first two months of the year. SUVs remained the primary growth driver with 35% year-on-year growth.
- Joint Venture (JV) Brands: Outperformed domestic brands, with Brilliance, DFM, and GAC seeing 40%, 22%, and 21% year-on-year sales growth in 1Q14, respectively.
- Domestic Brands: Geely, BYD, and GWM underperformed, with Geely and BYD experiencing sales declines and GWM missing expectations due to aging product portfolios and intensifying competition.
- Market Weight: Maintained at Market Weight.
- Top Picks: BUY Brilliance, DFM, and GAC due to robust product pipelines and stronger bargaining power. SELL Geely, BYD, and GWM due to loss of market share and over-optimistic earnings expectations.
- Key Catalysts: 1Q14 results, April sales reports, Hangzhou's car licence restrictions, and new model launches at the Beijing Auto Show.
Key Information
Indices Overview
| Index | Prev Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 16170.2 | (1.6) | (2.4) | (1.5) | (2.5) |
| S&P 500 | 1833.1 | (2.1) | (2.9) | (2.3) | (0.8) |
| FTSE 100 | 6642.0 | 0.1 | (0.1) | (0.7) | (1.6) |
| AS30 | 5477.5 | 0.3 | 1.1 | 0.9 | 2.3 |
| CSI 300 | 2273.8 | 1.6 | 4.3 | 7.8 | (2.4) |
| FSSTI | 3203.6 | (0.2) | (0.5) | 2.4 | 1.1 |
| HSCEI | 10421.3 | 0.4 | 3.2 | 9.5 | (3.7) |
| HSI | 23187.0 | 1.5 | 2.8 | 4.1 | (0.5) |
| JCI | 4765.7 | (3.2) | (2.1) | 1.3 | 11.5 |
| KLCI | 1859.5 | 0.2 | 0.2 | 1.7 | (0.4) |
| KOSPI | 2008.6 | 0.5 | 0.7 | 2.3 | (0.1) |
| Nikkei 225 | 14300.1 | 0.0 | (5.1) | (6.1) | (12.2) |
| SET | 1389.6 | 0.5 | (0.5) | 1.9 | 7.0 |
| TWSE | 8948.1 | 0.2 | 0.5 | 2.8 | 3.9 |
| BDI | 1029 | (3.0) | (16.7) | (34.1) | (54.8) |
| CPO (RM/mt) | 2650 | (0.3) | (3.3) | (8.5) | 3.0 |
| Nymex Crude (US$/bbl) | 103 | (0.0) | 2.2 | 3.3 | 5.0 |
Top Picks (BUY)
- Wilmar International (WIL SP/BUY/Target: S$4.20)
- First Resources (FR SP/BUY/Target: S$2.80)
- Bumitama Agri (BAL SP/BUY/Target: S$1.40)
- Golden Agri Resources (GGR SP/BUY/Target: S$0.70)
- Astra Agro Lestari (AALI IJ/BUY/Target: Rp27,500)
- Brilliance (1114 HK/BUY/Target: HK$17.50)
- DFM (489 HK/BUY/Target: HK$16.00)
- GAC (2238 HK/BUY/Target: HK$11.00)
Sell Recommendations
- Genting Plantations (GENP MK/SELL/Target: RM9.40)
- JLM Plantations (UMP MK/SELL/Target: RM3.20)
- Geely (175 HK/SELL/Target: HK$2.50)
- BYD (1211 HK/SELL/Target: HK$12.50)
- GWM (2333 HK/SELL/Target: HK$25.00)
Assumptions
- CPO Price Forecast: RM2,950/tonne for 2014 and 2015.
- PV Sales Growth: Expected to grow 10% year-on-year in 2014, down from 15.6% in 2013.
- GAC Sales Assumption: Cut by 2% to 1.5m units for 2014.
- Geely Sales Assumption: Cut by 10% to 530,000 units for 2014.
Risks
- Declining Crude Oil Prices: Could reduce the commercial viability of biodiesel and increase global edible oil supply, negatively impacting CPO prices.
- Macro Risk: A severe credit tightening could hurt automobile sales.
- Geopolitical Risk: Deterioration of Sino-Japan relations could lead to anti-Japanese riots in China, affecting Japanese car sales.
Corporate Events
| Event | Venue | Begin | Close |
|---|---|---|---|
| SPT Energy Corporate Roadshow | Kuala Lumpur | 10 Apr | 11 Apr |
| Palm Oil Dialogue Session | Kuala Lumpur | 11 Apr | 11 Apr |
| Malaysia Aica Corporate Roadshow | Singapore | 11 Apr | 11 Apr |
| Xingda International Corporate Roadshow & Luncheons | Taipei | 16 Apr | 17 Apr |
| Riverstone Corporate Luncheon | Singapore | 22 Apr | 22 Apr |
| Sa Sa Corporate Roadshow | Taipei | 29 Apr | 29 Apr |
Sector Catalysts
- Supply Shortfall: Expected to impact prices if the dry spell in 1H13 repeats.
- Weather Disruption: Could lead to lower CPO production and higher prices.
- Domestic Biodiesel Blend: B5 in Peninsular Malaysia is expected to absorb supply and keep inventory levels in check.
Summary of MPOB Data
| Metric | Jan 14 | Feb 14 | Mar 14 |
|---|---|---|---|
| CPO Production | 1.51m | 1.28m | 1.50m |
| Palm Oil Stocks | 1.93m | 1.66m | 1.69m |
| Palm Oil Exports | 1.37m | 1.35m | 1.24m |
| CPO Price (RM/tonne) | 2,529 | 2,632 | 2,855 |
Share Price Performance
| Company | Price (RM) | Target Price (RM) | Market Cap (US$m) | PE 2013 | PE 2014F | PE 2015F |
|---|---|---|---|---|---|---|
| Sime Darby | 9.34 | 8.70 | 17,574 | 16.8 | 20.1 | 17.9 |
| IOI Corporation | 4.86 | 4.40 | 9,575 | 17.7 | 20.4 | 18.6 |
| KL Kepong | 23.74 | 23.65 | 7,845 | 28.4 | 18.1 | 17.1 |
| Genting Plantations | 10.98 | 9.40 | 2,586 | 25.4 | 19.6 | 17.5 |
| JLM Plantations | 3.45 | 3.20 | 861 | 29.6 | 17.5 | 16.2 |
| Felda Global | 4.66 | NA | 5,269 | 17.3 | 20.3 | 18.5 |
| Wilmar International | 3.46 | 4.20 | 17,724 | 13.6 | 11.8 | 10.2 |
| Golden Agri-Resources | 0.595 | 0.700 | 6,115 | 18.3 | 14.0 | 12.7 |
| First Resources | 2.38 | 2.80 | 3,018 | 13.9 | 13.8 | 12.6 |
| Bumitama Agri | 1.05 | 1.40 | 1,477 | 19.9 | 13.7 | 12.6 |
| Indofood Agri | 1.05 | 1.00 | 1,186 | 27.3 | 16.4 | 13.8 |
| Kencana Agri | 0.220 | 0.270 | 202 | 57.2 | 13.9 | 8.4 |
| Mewah | 0.490 | 0.420 | 591 | 28.2 | 17.6 | 12.9 |
| Astra Agro Lestari | 26,300 | 27,500 | 3,646 | 25.8 | 15.6 | 14.4 |
| London Sumatra | 2,165 | 1,950 | 1,301 | 21.8 | 15.8 | 14.4 |
| BW Plantation | 1,290 | 1,350 | 508 | 29.7 | 17.5 | 16.1 |
| Sampoerna Agro | 2,000 | 1,900 | 333 | 28.4 | 14.1 | 12.7 |
Analyst Contact
-
Regional Research Team
- Email: research@uobkayhian.com
- Phone: +65 6535 6868
-
Automobile Sector Analyst
- Ken Lee: +852 2236 6760 | ken.lee@uobkayhian.com.hk
- Renee Tai: +852 2826 1324 | renee.tai@uobkayhian.com.hk
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