20140820-大华继显-Regional_Morning_Notes_41页_2mb

Regional Morning Notes Summary

Core Content Overview

This document provides a detailed summary of company results and market updates for various regions including China, Hong Kong, Indonesia, Malaysia, Singapore, and Thailand, along with key indices, corporate events, and stock valuations. It includes analysis of financial performance, earnings revisions, and potential catalysts affecting stock prices.

Main Points and Key Information

China

• Bank of China (3988 HK)

  • 1H14: Earnings were in line with expectations, but the NPL (Non-Performing Loan) trend surprised on the downside.
  • NPL increased 6.9% qoq to Rmb85,860m, with a NPL ratio rising to 1.02%.
  • Provisioning charges surged 98% yoy, and coverage ratio declined.
  • Despite strong fee income growth, NIM (Net Interest Margin) slightly decreased qoq.
  • Maintained HOLD recommendation with a revised target price of HK$4.00.

• China Resources Land (1109 HK)

  • 1H14: Very strong earnings with core net profit up 83.7% yoy.
  • Gross margin improved to 30.6%, and net gearing ratio remained below 60%.
  • Expected valuation recovery due to potential asset injections and improved margins.
  • Maintained BUY recommendation with a revised target price of HK$21.42.

• Maanshan Iron and Steel (323 HK)

  • 1H14: Results poorer than expected due to low cost pressure and fiscal support.
  • Expected turnaround in 3Q14.

• PetroChina (857 HK)

  • 1H14: Decent earnings growth expected.

Hong Kong

• BOC Hong Kong (2388 HK)

  • 1H14: Earnings in line with expectations, but limited catalysts ahead.

• Galaxy Entertainment (27 HK)

  • 2Q14: Results in line with expectations, with potential for strong sequential recovery due to low-base effect.

Indonesia

• Ciputra Development (CTRA IJ)
  • 7M14 marketing sales reached Rp3.9t, or 44% of the 2014 target.
  • Maintained HOLD due to limited share price upside.

Malaysia

• AMMB Holdings (AMM MK)
  • 1QFY15: Expected one-off gain on disposal of insurance stakes, but core earnings growth unlikely to excite.
  • Maintained HOLD with a target price of RM7.82.

Singapore

• Sector Update: Plantation
  • 2Q14: Earnings mainly dragged down by thin refining margins and crushing losses.
  • Pure upstream players outperformed.

Thailand

• GFPT (GFPT TB)
  • Maintains a promising outlook for 2H14 and 2015.
  • Target price of Bt19.50.

Key Indices

Top Picks (BUY)

Sell: UMWH Holdings (UMWH MK)

• Current Price: HK$12.30
• Target Price: HK$10.00
• Potential Downside: -18.7%

Key Assumptions

Corporate Events

Summary of Key Financials and Metrics

• Bank of China (3988 HK)

  • Earnings in line with expectations, but NPL and provisioning concerns.
  • NPL balance increased 30% hoh (reported 17.2% hoh).
  • Maintained HOLD recommendation with target price HK$4.00.

• China Resources Land (1109 HK)

  • Strong core net profit growth of 83.7% yoy.
  • Maintained BUY recommendation with target price HK$21.42.
  • Expected asset injections and policy relaxation to drive recovery.

Conclusion

The summary highlights the mixed performance across different sectors and regions, emphasizing the importance of NPL trends, fee income growth, and potential asset injections in shaping investment decisions. Analysts recommend maintaining HOLD or BUY based on the company's financial health, market position, and expected future performance.