Regional Morning Notes Summary
Core Content Overview
This document provides a summary of financial results and market analysis for various companies in different regions, focusing on performance, valuation, and future outlook. It also includes key indices and corporate events relevant to the financial markets.
Key Regions and Companies
Hong Kong
- MGM China (2282 HK)
- 4Q14 results were in line with expectations, with higher-than-expected total dividend.
- Property EBITDA dropped 21.4% yoy due to VIP revenue decline and lower rolling chip volume.
- VIP revenue fell 38.2% yoy, affected by poor luck factor.
- Mass-market revenue rose 17.9% yoy due to the shift of gaming tables from VIP to mass segment.
- The company declared a total dividend payout of 89%, exceeding expectations.
- Dividend yield is 7.0% for 2014 and expected to drop to 4.6% in 2015.
- The target price was reduced to HK$24.10 from HK$26.20 due to higher capital expenditures for the Cotai project.
- The upcoming Cotai project is expected to open in 2016 and will impact near-term free cash flow and dividends.
- Maintained "BUY" rating due to strong execution capability and potential for mass-market growth.
Indonesia
- Dharma Satya Nusantara (DSNG IJ)
- 2014 net profit increased by 219.8% yoy to Rp649.7b, in line with expectations.
- CPO production grew by 16.4% yoy to 390,857 tonnes, supported by higher production volume and ASP.
- FFB nucleus yield reached 26.2 tonnes/ha, the highest among peers.
- The company achieved 95% of its targeted new planting of 10,000ha per year.
- Currently trading at 10.4x 2016F PE, slightly below the peers' average of 11.6x.
- Wood products revenue declined slightly, while palm oil products revenue increased.
- The stock is not rated, but it is viewed as a strong performer in the palm oil sector.
Malaysia
- Deleum (DLUM MK)
- 2014 results showed strong top- and bottom-line growth due to full mobilisation of slickline units.
- Maintained "BUY" rating with a target price of RM1.90.
Singapore
- Bumitama Agri (BAL SP)
- 2014 net profit rose by 43.0% yoy to S$1.257b, driven by forex gains, production growth, and higher CPO ASP.
- Maintained "BUY" rating with a target price of S$1.45.
- Genting Singapore (GENS SP)
- Property EBITDA was in line on a hold-normalised basis.
- Offers good long-term upside due to historically cheap valuation and foreign forays.
- Maintained "BUY" rating with a target price of S$1.32.
Thailand
- Bangkok Chain Hospital (BCH TB)
- 4Q14 results were better than expected, leading to an upgrade to "HOLD".
- WMC remains a drag on performance.
- Hana Microelectronics (HANA TB)
- Core profit was flat qoq despite the off-peak season.
- Banpu (BANPU TB)
- Dynasty Ceramic (DCC TB)
- In a good position to benefit from provincial consumption recovery.
- Bangchak Petroleum (BCP TB)
- "The next chapter begins".
- Krung Thai Bank (KTB TB)
- Maintained "BUY" rating with a target price of Bt29.00.
- Sino Thai Engr (STEC TB)
- Maintained "BUY" rating with a target price of Bt30.25.
- UMWH Holdings (UMWH MK)
- "SELL" rating with a target price of Bt10.00, showing a potential decline of 9.1%.
Key Indices
| Index |
Previous Close |
1D % |
1W % |
1M % |
YTD % |
| DJIA |
18209.2 |
0.5 |
0.9 |
3.0 |
2.2 |
| S&P 500 |
2115.5 |
0.3 |
0.7 |
3.1 |
2.7 |
| FTSE 100 |
6949.6 |
0.5 |
0.7 |
1.7 |
5.8 |
| AS30 |
5890.0 |
0.3 |
1.2 |
7.7 |
9.3 |
| CSI 300 |
3522.3 |
0.7 |
3.4 |
(3.1) |
(0.3) |
| FSSTI |
3437.6 |
0.5 |
0.3 |
0.8 |
2.2 |
| HSI |
24750.1 |
(0.3) |
0.3 |
(0.4) |
4.9 |
| BDI |
516 |
0.8 |
0.0 |
(28.3) |
(34.0) |
| CPO (RM/mt) |
2258 |
(1.5) |
(1.2) |
0.3 |
(1.7) |
| Nymex Crude |
49 |
(0.7) |
(8.3) |
7.7 |
(7.9) |
Key Assumptions
| Country |
2013 GDP (%) |
2014 GDP (%) |
2015F GDP (%) |
| US |
1.9 |
2.4 |
3.2 |
| Euro Zone |
-0.4 |
0.8 |
1.1 |
| Japan |
1.5 |
0.7 |
1.0 |
| Singapore |
4.4 |
2.9 |
3.3 |
| Malaysia |
4.7 |
6.0 |
4.7 |
| Thailand |
2.9 |
0.7 |
4.0 |
| Indonesia |
5.8 |
5.0 |
5.5 |
| Hong Kong |
2.9 |
3.5 |
3.7 |
| China |
7.7 |
7.2 |
7.0 |
| Indicator |
2014 Value |
2015F Value |
2016F Value |
| Brent (US$/bbl) |
99.45 |
65 |
70 |
| CPO (US$/mt) |
722 |
765 |
788 |
| BDI |
1,101 |
1,300 |
1,400 |
Corporate Events
| Event |
Venue |
Dates |
| Plantation Outlook Seminar 2015 |
Kuala Lumpur |
2 Mar |
| First Resources Luncheon |
Kuala Lumpur |
4 Mar |
| CIFI Holdings Roadshow |
Singapore |
16 Mar |
| ASEAN Conference |
Taipei |
17–18 Mar |
Top Picks
BUY
- Sunac China (1918 HK): Target price HK$9.29, potential upside of 33.7%.
- ICBC (1398 HK): Target price HK$6.90, potential upside of 21.1%.
- Bank Mandiri (BMRI J): Target price Bt12,500, potential upside of 5.3%.
- Ijm Corp (JIM MK): Target price RM7.60, potential upside of 6.3%.
- DBS (DBS SP): Target price S$23.55, potential upside of 19.1%.
- Pacific Radiance (PACRA SP): Target price S$1.00, potential upside of 37.0%.
- Krung Thai Bank (KTB TB): Target price Bt29.00, potential upside of 25.0%.
- Sino Thai Engr (STEC TB): Target price Bt30.25, potential upside of 21.5%.
SELL
- UMWH Holdings (UMWH MK): Target price Bt10.00, potential downside of 9.1%.
Summary of Key Financial Metrics
MGM China (2282 HK)
- Dividend Yield: 7.9% (2014), expected to drop to 4.6% in 2015.
- Net Profit (adj.): 5,706.9 HK$m (2014), expected to be 4,769.8 HK$m (2015F), 4,780.7 HK$m (2016F), and 5,915.6 HK$m (2017F).
- EBITDA: 6,593.2 HK$m (2014), expected to be 5,877.6 HK$m (2015F), 6,249.7 HK$m (2016F), and 8,317.9 HK$m (2017F).
- PE Ratio: 12.7 (2014), expected to be 15.2 (2015F), 15.3 (2016F), and 12.4 (2017F).
- Dividend Payout Policy: Management is committed to a 35% payout, with potential reduction to 70% in 2015.
Dharma Satya Nusantara (DSNG IJ)
- Net Profit (2014): Rp649.7b, up 219.8% yoy.
- CPO Production (2014): 390,900 tonnes, up 16.4% yoy.
- FFB Nucleus Yield: 26.2 tonnes/ha, the highest among peers.
- PE Ratio: 10.4x 2016F, below peers' average of 11.6x.
- New Planting: Achieved 95% of the targeted 10,000ha per year.
Valuation and Investment Catalysts
- MGM China: Maintained "BUY" due to strong execution and potential for mass-market growth.
- Dharma Satya Nusantara: Not rated, but shows strong performance in palm oil sector.
- Investment Catalysts: A rebound in market monthly GGR, stronger-than-expected results, and updates on the Cotai project could drive share price.
Analyst Contact
