20150615-杰富瑞-PrimeTime_Asia_12页_285kb_285kb

Asia Research Summary

Key Takeaways

• Investor Activity: Mutual fund/ETF investors have been cautious in Asian equities, withdrawing US$5.8bn from equities and US$5.9bn from global bonds, the largest withdrawal since January 2014. They have been marginal buyers in commodities.
• Market Trends: The PC market is expected to decline by 7% YoY in 2015, with pessimism on OEMs and ODMs in 2H15 due to weak demand and inventory adjustments.
• Earnings Outlook: Several companies are expected to report weaker earnings in 2Q15, with some anticipating profit warnings for the first half of 2015.

Sector Analysis

Basic Materials

• Mitsubishi Chemical (4188 JP):
  • Rating: HOLD
  • Price target: ¥800 to ¥690
  • Earnings estimates: ¥58.70 ▼ ¥44.40 (current year), ¥47.10 ▼ ¥43.70 (next year)
  • Est. Type: EPS
  • Key Point: Petrochemical stocks are in a late stage of outperformance due to rising oil prices and declining industrial production.

Energy

• Tokio Marine Holdings (8766 JP):

  • Rating: BUY
  • Price target: ▲¥6,100 to ¥6,300
  • Earnings estimates: ¥477.63 ▲ ¥521.12 (current year), ¥560.65 ▲ ¥598.28 (next year)
  • Est. Type: EPS
  • Key Point: The acquisition of HCC Insurance Holdings is a mid-term positive, with revised earnings and target price due to the deal.

• POSCO Chemtech (003670 KS):

  • Rating: BUY
  • Price target: ▼KRW190,000 to KRW15,000
  • Key Point: Margins are expected to recover in 2H15 after a sharp decline in 1H15 due to falling oil prices.

• Reliance Industries (RIL IN):

  • Rating: BUY
  • Price target: INR1,130.00
  • Key Point: Reliance Jio is set for a December 2015 launch, and the company is expected to benefit from strong refining and petrochemical margins.

Company-Specific Analysis

Cathay Pac Air (293 HK)

• Rating: HOLD
• Price target: HK$20.60
• Key Point: Passenger yield is below expectations, and the company's valuation is in line with Chinese carriers, but fundamentals are less exciting.

ABB Limited (ABB IN)

• Rating: BUY
• Price target: INR1,700.00
• Key Point: Strong export growth and cost focus are expected to drive operating leverage and improve competitiveness.

Astra International (ASII IJ)

• Rating: HOLD
• Price target: ▼IDR9,100.00 to IDR7,550.00
• Key Point: The company is downgraded to Hold due to a business down-cycle and no signs of recovery in the auto sector.

Youngtek Electronics Corp (6261 TT)

• Rating: Neutral
• Price target: TWD75.00 to TWD65.00
• Key Point: Downgraded to Neutral due to below-trend seasonality and industry headwinds from major clients.

Richtek Technology Corp (6286 TT)

• Rating: Neutral
• Price target: TWD187.00
• Key Point: Outlook has turned conservative, leading to a downgrade to Neutral with a revised earnings forecast.

FineTek Co., Ltd. (4549 TT)

• Rating: Add
• Price target: TWD175.50 to TWD132.00
• Key Point: The company has technical advantages and product uniqueness, but short-term operations are lackluster due to weak customer stocking.

Twitter (TWTR)

• Rating: BUY
• Price target: $60.00
• Key Point: CEO Dick Costolo is stepping down, with Jack Dorsey as interim CEO. The new CEO should focus on user growth and product improvements.

Micron Technology (MU)

• Rating: BUY
• Price target: $40.00
• Key Point: Positive outlook on DRAM under-supply in 2H15, driven by mobile demand and PC restocking. Considered a good buy due to cautious investor sentiment.

Regional Insights

India

• Heard on the Street - 4QFY15:
  • Sales growth for India ex Fin Ex Energy was 0.8% YoY, below consensus.
  • EBITDA margins improved by 57bps YoY, but still below expectations.

Indonesia

• Indo Premier: Financials:
  • Rising risk of directed lending and state intervention in populist policies.
  • State banks are impacted, with BBRI being the most affected. BMRI and BBNI are still favored.

Events and Marketing

Company Marketing Events

• A list of upcoming events includes presentations and conferences by various companies and analysts in locations such as New York, London, and Hong Kong.
• Key events include:
  • Jefferies 2015 Shipping Conference (Marine Money)
  • Jefferies 2015 Specialty Pharma CEO Summit
  • Jefferies 2015 Financial Services 1x1 Conference
  • Nasdaq 32nd Investor Program

Analyst Marketing Events

• Analysts are scheduled to attend events in multiple regions, including New York, London, and Frankfurt.
• Key analysts include Christopher LaFemina, Makarim Salman, and Hiroko Sato, who are involved in multiple engagements.

Ratings Explanation

• Buy: Expected total return of 15% or more within 12 months.
• Hold: Expected total return of ±15% within 12 months.
• Underperform: Expected total return of 10% or less within 12 months.
• NR/CS/NC/Restricted/Monitor: Ratings are either suspended, coverage is suspended, not covered, or restricted due to regulations or company policy.

Summary

The document provides a comprehensive analysis of Asian and global equities, focusing on investor behavior, sector performance, and company-specific insights. Key themes include cautious investor sentiment, declining earnings in certain sectors, and the impact of market events on company valuations. The report highlights the importance of earnings revisions, strategic moves such as acquisitions, and macroeconomic factors influencing stock performance. It also outlines upcoming analyst and company events, along with a detailed explanation of Jefferies' rating system.