20170822-大华继显-Regional_Morning_Notes_34页_1mb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides a detailed analysis of stock performance and financial results for several companies in China, Indonesia, Malaysia, and Thailand, as well as key market indices and corporate events for the week of 22 August 2017. It includes company-specific results, financial metrics, valuation analysis, and investment recommendations.

Main Points by Region

China

China Overseas Land (688 HK):
- 1H17 Results: Achieved a gross margin of 30%, exceeding expectations and expected to remain sustainable through 2017.
- Sales Target: Revised up by 10% for 2017, with contracted sales reaching HK$144b in 7M17, representing 61.6% of the revised target.
- Gearing Ratio: Increased to 16.1% in 1H17, expected to rise further due to land replenishments.
- Dividend Yield: Stabilized at HK$0.35/share, with a lower payout ratio compared to 1H16.
- Target Price: Raised to HK$32.18, with an upside of +26.2%.
- Recommendation: Maintain BUY.

Indonesia

Erajaya Swasembada (ERAA IJ):
- Initiate Coverage: Attractively valued at 6.8x 2017F PE.
- EPS Growth: Expected to grow by 16.4% and 15.1% in 2017-18.
- Recommendation: BUY with a target price of Rp910.

Malaysia

Sector Upgrade: Building Materials sector upgraded to OVERWEIGHT due to a 12% surge in steel prices.
Ann Joo (MLK MK):
- 1H17 Results: Below expectations due to a step-down in 2H17 profit from SEV tariff changes, but lower O&M costs helped cushion the impact.
- Recommendation: HOLD with a target price of RM1.05.
Petronas Dagangan (PETD MK):
- 1H17 Results: Profit in line with expectations despite inventory lagged loss, with strong cash flow supporting capex.
- Recommendation: BUY with a target price of RM27.20.
Dialog Group (DLG MK):
- Update: Vopak approved 0.43m cbm of new storage capacity in Pengerang Phase 1, maintaining BUY with a target of RM2.20.

Thailand

CH Karnchang (CK TB):
- Update: Strong earnings growth expected in 2018 due to full contribution from mega projects and support from associates.
- Recommendation: BUY with a target price of Bt37.00.

Key Indices

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	21703.8	0.1	-1.3	0.6	9.8
S&P 500	2428.4	0.1	-1.5	-1.8	8.5
FTSE 100	7318.9	-0.1	-0.5	-1.8	2.5
AS30	5780.0	-0.3	0.0	0.2	1.1
CSI 300	3741.0	0.4	1.3	0.3	13.0
FSSTI	3247.0	-0.2	-1.9	-2.0	12.7
HSI	27154.7	0.4	-0.4	1.7	23.4
KLCI	1771.6	-0.3	0.0	0.7	7.9
KOSPI	2355.0	-0.1	1.5	-3.9	16.2
Nikkei 225	19393.1	-0.4	-0.7	-3.5	1.5
SET	1569.6	0.2	0.5	-0.2	1.7
TWSE	10326.4	0.0	1.0	-1.1	11.6
BDI	1260	1.0	9.1	29.0	31.1
CPO (RM/ml)	2639	0.7	0.5	1.4	-17.5
Brent Crude	52	-2.0	1.8	7.5	-9.1

Top Picks

Ticker	CP (Icy)	TP (Icy)	Pot. +/−
Alibaba	169.25	205.00	21.1
Beijing Ent. Water	6.50	7.60	16.9
Ace Hardware	1,065.00	1,300.00	22.1
Waskita Karya	2,260.00	3,350.00	48.2
Ekovest	1.12	1.55	38.4
OCBC	11.02	13.38	21.4
Siam Cement	488.00	600.00	23.0
Great Wall Motor	10.08	5.50	-45.4
Sapura Energy	1.49	1.38	-7.4

Key Financials and Assumptions

Metric	2016	2017F	2018F	2019F
GDP Growth (% yoy)	1.6	2.5	2.5	2.5
China GDP Growth (% yoy)	6.7	6.6	6.3	6.3
Brent Crude (US$/bbl)	45	55	58	58
CPO (RM/mt)	2,653	2,600	2,400	2,400

Corporate Events

Analyst Presentation on Malaysia Technology Sector: Taipei, 22–23 Aug
Roadshow with Logan Property Holdings: Taipei, 23 Aug
Roadshow with China TCM Holdings: Hong Kong & Shanghai, 23–28 Aug
Roadshow with Globetronics Technology: Taipei, 24 Aug
Roadshow with Meidong Auto Holdings: Hong Kong, 25 & 28 Aug
Roadshow with Dah Chong Hong: Singapore, 28 Aug
Roadshow with Sihuan Pharmaceutical: Taipei, 1 Sep
Roadshow with Anta Sports Products Ltd: Shanghai, 5 Sep
Luncheon with Ten Pao Group Holdings Ltd: Hong Kong, 5 Sep
Analyst Marketing on 2H17: Singapore, 5–6 Sep
Roadshow with Top Glove Corporation: US/Canada, 5–12 Sep
Roadshow with Health Management Int'l: Kuala Lumpur, 6 Sep
Roadshow with Globetronics Technology: Hong Kong, 12 Sep
Asian Gems Conference 2017: Singapore, 10–11 Oct

Valuation and Recommendations

China Overseas Land (688 HK): Maintain BUY; target price HK$32.18.
Lee & Man Paper (2314 HK): Maintain BUY; target price HK$11.00.
Erajaya Swasembada (ERAA IJ): BUY; target price Rp910.
CH Karnchang (CK TB): BUY; target price Bt37.00.

Summary of Key Financial Metrics

China Overseas Land:
- 1H17 Net Profit (adj.): HK$28,939m
- 1H17 EPS: HK$1.55
- 2017F PE: 7.7x
- 2018F PE: 6.7x
- 2019F PE: 5.9x
Lee & Man Paper:
- 1H17 Net Profit: HK$2,194m
- 1H17 EPS: 19.2 fen
- 2017F PE: 13.1x
- 2018F PE: 11.2x
- 2019F PE: 10.0x

Key Financial Highlights

China Overseas Land:
- Gross margin increased to 30.5% in 1H17, up from 27.8% in 2016.
- Core net profit margin rose by 0.9ppt to 19.4%.
- Net gearing increased to 16.1% in 1H17, expected to rise further in 2H17.
- Dividend yield increased to 3.4% in 1H17, with a target payout ratio of 30%.
Lee & Man Paper:
- 1H17 Net profit surged 53.4% yoy to HK$2.19b.
- Gross margin rose to 26.9%, driven by higher ASP and improved efficiency.
- Tissue paper segment saw 168% revenue growth due to production ramp-up.
- Management guided for expansion in tissue paper production capacity to 795,000 tonnes by end-2018.
- Raised target price to HK$11.00 due to improved margins and expected price hikes.

Conclusion

The report highlights positive results and growth potential for several companies across the region, particularly in the construction and paper sectors. It emphasizes the potential for continued earnings growth in China Overseas Land and Lee & Man Paper, driven by improved margins, increased production capacity, and favorable market conditions. The analysis also includes key corporate events and investment recommendations, supporting a BUY stance for the listed companies.

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