20160610-大华银行-Regional_Morining_Notes_16页_825kb

报告摘要

Regional Morning Notes Summary - 10 June 2016

Core Content Overview

This document provides an analysis of regional market updates, focusing on China and Malaysia, with additional insights into Singapore and Thailand. It includes economic data, sector updates, company-specific information, and investment recommendations.

China Economic Update

Inflation Trends

CPI Inflation: Moderated in May 2016 to 2.0% yoy, down from 2.3% yoy in April, missing the consensus estimate of 2.2% yoy.
PPI Deflation: Continued to ease, dropping to -2.8% yoy in May, better than the market expectation of -3.2% yoy.
Drivers: Vegetable prices fell due to short production cycles and weather recovery, while pork prices rose sharply due to longer supply cycles.
Core Inflation: Increased to 1.6% yoy, indicating inflationary pressures spreading beyond food and fuel.
Sectoral Impact: Rising rental rates, healthcare, and household services pushed core inflation up, while transportation and communication saw deflation.

Key Assumptions

GDP Growth: Expected to remain stable across regions.
Commodity Prices: Projected to rise, potentially pushing PPI and CPI higher.
Brent Crude: Expected to average 42 US$/bbl in 2016, rising to 54 US$/bbl in 2017.
CPO (Crude Palm Oil): Expected to rise to 2,500 RM/mt in 2016 and 2,600 RM/mt in 2017.

Insurance Sector in China

Overview

Online Insurance Growth: Rapid growth over the past five years, with many insurers forming joint ventures (JVs) with internet companies.
Earnings Contribution: Limited in the short term due to dominance of conventional players and challenges for newcomers.
Market Share: Online insurance companies have a small market share, with only 0.27% for Zhong An Insurance in 2015.

Key Developments

CPIC & Baidu JV: CPIC will hold at least 50% equity in a new motor vehicle insurance company with Rmb2b registered capital.
Online Life vs P&C: Online life insurance premiums grew 142x to Rmb146b in 2015, while P&C grew 35x to Rmb78b. Life insurance is more popular due to higher investment returns.

Investment Picks

Ping An Insurance (2318 HK): Buy recommendation with a target price of HK$45.00, current price HK$35.60, and a potential upside of 26.4%.
CPIC (2601 HK): Buy recommendation with a target price of HK$32.50, current price HK$27.50, and a potential upside of 23.1%.

Malaysia: BIMB Holdings (BIMB MK)

Fundamentals

Asset Quality: Strong, with a gross impaired loan ratio of 0.94% in 1Q16, the third lowest in the industry.
ROE Target: Expected to meet 15-16% ROE.
NIM Compression: Guided to be 5-10bp, milder than previous assumptions of 18bp.

Stock Impact

Outperformed Indices: The stock has outperformed the FBMKLCI and KLFIN indices by 4.7% and 5.4% respectively since coverage initiation.
Asset Quality Concerns: Fund managers are concerned about personal loans, but mitigated by strong salary-linked schemes and low-risk customer base.
Loan Composition: Personal loans make up 29% of total loans, with a reduced exposure to high-risk O&G sector.

Financial Highlights

Net Profit: Expected to grow from RM547m in 2015 to RM570m in 2016.
EPS (sen): Projected to increase from 36.6 in 2015 to 38.1 in 2016.
P/B Ratio: Expected to be 1.85x for 2016F.
Dividend Yield: Projected to be 3.7% in 2016.

Valuation & Recommendation

Target Price: RM4.40, implying a +7.3% upside from current price RM4.10.
Recommendation: Maintain BUY due to superior ROE (16% vs 10.3% industry average), strong loan growth, and robust loan loss coverage (200% vs 94% industry).

Other Market Updates

Thailand: Khon Kaen Sugar Industry (KSL TB)

Earnings Outlook: Expected to drop both qoq and yoy in 2QFY16 due to market conditions.

Singapore: China Aviation Oil Singapore Corp (CAO SP)

Earnings Outlook: Buy recommendation with a target price of S$1.56, current price S$1.17.

Key Indices

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	17985.2	-0.1	0.8	1.6	3.2
S&P 500	2115.5	-0.2	0.5	2.8	3.5
FTSE 100	6231.9	-1.1	0.7	1.9	-0.2
AS30	5437.4	-0.1	1.6	0.6	1.7
CSI 300	3164.0	-0.4	0.1	3.2	-15.2
FSSTI	2843.8	-0.6	1.7	3.7	-1.4
HSCEI	9027.8	0.3	3.7	6.8	-6.6
HSI	21297.9	-0.1	2.6	5.7	-2.8
JCI	4876.8	-0.8	0.9	2.4	6.2
KLCI	1650.5	-0.4	1.2	0.9	-2.5
KOSPI	2024.2	-0.1	2.1	2.1	3.2
Nikkei 225	16668.4	-1.0	0.6	0.6	-12.4
SET	1435.7	-0.7	0.8	3.3	11.5
BDI	611	0.2	0.8	-0.8	27.8
CPO (RM/ml)	2620	-1.8	-0.8	0.3	19.1
Brent Crude	52	-1.1	3.8	19.1	39.4

Corporate Events

China Maple Leaf Educational Luncheon: Hong Kong, 13 Jun
Naga Corp Ltd Roadshow: Kuala Lumpur, 15-16 Jun
BIMB Holdings Bhd Roadshow: Singapore, 16-17 Jun
Singapore Strategy Analyst Presentation: Kuala Lumpur, 16-17 Jun

Analysts

Chaoping Zhu: +8621 5404 7225 ext. 822, chaoping@uobkayhian.com
Ye Xu: +8621 5404 7225 ext. 820, xuye@uobkayhian.com

Additional Insights

PBOC Policy: May adopt more cautious monetary policy due to easing PPI deflation and strong inflation expectations.
Loan Loss Coverage (LLC): BIMB has a 200% LLC ratio, significantly higher than the industry's 94%.
Cost-to-Income Ratio (CIR): Expected to remain elevated at 58% in 2016 before improving to 57% in 2017.
Loan Growth: BIMB's loan growth has outperformed the industry since 2011, with 16% in 2015 and expected 11-13% in 2016.