20140731-大华继显-Regional_Morning_Notes_30页_1mb

报告摘要

Regional Morning Notes Summary - 31 July 2014

Core Content Overview

This document provides a summary of regional market updates, focusing on the shipping and energy sectors in China, Hong Kong, Malaysia, and Singapore, along with key indices and corporate events for the period. It outlines the expected performance of various companies, including earnings projections, target prices, and investment recommendations.

Main Sectors and Key Points

Shipping Sector

1H14 Results Preview: Most shipping carriers are expected to report losses due to weak BDI and container freight rates, except for CSCL and CSD, which may post profits due to one-off gains and improved VLCC rates, respectively.
Rate Increase Plan: Container shipping companies plan to raise freight rates starting from 1 August. The proposed increases range from US$450/TEU to US$1,000/TEU for different lanes.
BDI Trends: BDI remains at a low level (747), down 31% yoy. Coastal coal freight rates are showing signs of recovery, while Capesize rates are expected to improve in 4Q14.
Investment Recommendation: Maintain MARKET WEIGHT on the shipping sector, with container shipping stocks likely to outperform in 3Q14 due to peak season demand and high utilisation rates.
Top Picks:
- OOIL (316 HK): BUY with a target price of HK$57.00.
- CSCL (2866 HK): BUY with a target price of HK$2.39.
- NOL (NOL SP): BUY with a target price of SGD1.17.

City Gas Distribution in China

1H14 Earnings Preview: Divergent earnings growth is expected, with ENN Energy leading at 49% yoy due to the removal of a non-cash loss, while Kunlun Energy and Towngas China are expected to see single-digit growth due to E&P losses and forex effects.
Investment Recommendation: Maintain OVERWEIGHT on the sector, with ENN Energy, Kunlun Energy, CR Gas, and Towngas China as top picks.
Key Highlights:
- ENN Energy (2688 HK): Expected to report a 49% yoy net profit increase, driven by the removal of a non-cash loss.
- Kunlun Energy (135 HK): Anticipated 7% yoy earnings growth, with potential asset injection from PetroChina.
- CR Gas (1193 HK): Slower earnings growth due to a shift from M&A to organic growth.
- Towngas China (1083 HK): Expected 20% yoy earnings growth, despite forex losses from the RMB depreciation.
- BEHL (392 HK): 20% yoy earnings growth from Beijing Pipeline transmission volume rebound.

China Power Sector: Huaneng Power International (902 HK)

1H14 Results: Net profit of Rmb6,808m, up 21% yoy, in line with expectations.
Performance Drivers: Weak coal prices and cost savings contributed to the net profit growth.
Target Price: Maintained at HK$9.40, with a HOLD recommendation.
Key Financials:
- Revenue: Rmb64,606m (up 0.8% yoy).
- Fuel cost: Down 3.1% yoy to Rmb34,570m.
- Net profit: Up 21.1% yoy to Rmb6,808m.
- Net gearing ratio: Reduced from 1.70 to 1.28.
Coal Price Outlook: Expected to decrease by 5% yoy, with further declines anticipated in 2H14.

Key Indices Overview

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	16880.4	-0.2	-1.2	0.3	1.8
S&P 500	1970.1	0.0	-0.9	0.5	6.6
FTSE 100	6773.4	-0.5	-0.4	0.4	0.4
AS30	5615.1	0.6	0.9	4.3	4.9
CSI 300	2322.0	-0.4	5.7	7.2	-0.3
FSSTI	3353.7	-0.1	1.1	3.0	5.9
HSCI	24732.2	0.4	3.2	6.6	6.1
JCI	5088.8	-0.2	0.0	5.0	19.1
KLCI	1878.3	0.1	0.5	-0.2	0.6
KOSPI	2082.6	1.0	2.7	4.0	3.5
Nikkei 225	15646.2	0.2	2.1	3.2	-4.0
SET	1518.8	-0.1	-1.5	2.2	16.9
TWSE	9447.0	0.6	-0.6	0.6	9.7
BDI	754	0.9	3.7	-11.3	-66.9
CPO (RM/mt)	2345	0.2	-1.5	-6.6	-8.8
Nymex Crude	99	-1.0	-2.7	-5.8	0.9

Key Investment Recommendations

BUY Recommendations

OOIL (316 HK): Target price HK$57.00, 0.7x 2014F P/B, strong earnings recovery potential.
CSCL (2866 HK): Target price HK$2.39, expected to post profits in 1H14 due to one-off gains.
NOL (NOL SP): Target price SGD1.17, with potential for earnings recovery.
ENN Energy (2688 HK): Target price HK$65.00, expected 23% yoy sales volume growth.
Kunlun Energy (135 HK): Target price HK$16.60, potential asset injection and LNG growth.
CR Gas (1193 HK): Target price HK$29.60, slower growth due to organic strategy.
Towngas China (1083 HK): Target price HK$11.00, expected 20% yoy earnings growth.
BEHL (392 HK): Target price HK$80.00, expected 20% yoy earnings growth.

SELL Recommendations

Indorama Ventures (IVL TB): Downgraded to SELL, with a target price of Bt22.00.
China COSCO (1919 HK): SELL, with a target price of HK$2.56.

HOLD Recommendations

Pacific Basin (2343 HK): HOLD, with a target price of HK$5.14.
Wynn Macau (1128 HK): HOLD, with a target price of HK$31.90.

Key Catalysts and Risks

Catalysts

Better US and European economic data.
Natural gas price hike postponement.
Rate recovery in container shipping due to peak season.
Improved efficiency and asset injection for Kunlun Energy.

Risks

Slowdown in China's FAI and steel production.
Unexpected gas price hike.
Weak Capesize rates and high iron ore inventory in China.
Forex losses due to RMB depreciation.

Corporate Events

Greater China 2H14 Market Strategy Analyst Presentation: Scheduled in Hong Kong, Singapore, Kuala Lumpur, and Taipei from 31 July to 12 August.
Thailand 2H14 Market Strategy & Property Sector Analyst Presentation: In Singapore and Kuala Lumpur from 30 July to 5 August.
Bumilama Agri Corporate Luncheon & Top Glove Corporate Roadshow: In Singapore and Montreal on 13 August and 2 September.