20150508-大华继显-Regional_Morning_Notes_33页_2mb

Regional Morning Notes Summary - 08 May 2015

Core Content

This document provides an overview of key financial and market updates for several companies in China, Malaysia, Indonesia, and Singapore, along with market indices and analyst recommendations.

Main Points

China

• Yonghui Superstores (601933 CH): Initiated coverage with a BUY recommendation. The company is a leading modern grocery retailer in China, with a strong presence in over 13 provinces. It has a significant market share in fresh produce and is expected to benefit from online and offline sales growth, as well as strategic alliances. Key highlights:

  • 46% of sales from fresh products, enabling it to counter online retail challenges.
  • Market share increased from 2.9% in 2011 to 5.3% in 2014.
  • Strategic acquisitions: 19.99% stake from Dairy Farm International and 21.7% stake in Lianhua Supermarket Holdings.
  • Projected net profit CAGR of 32.4% from 2014 to 2017, driven by same-store sales growth, new store contributions, and margin improvements.
  • Target price: Rmb14.00, based on 36.8x 2016F PE.

• Sunac China Holdings (1918 HK): Update on the long-delayed deal with Greentown. The transaction was finalized, with Sunac disposing of three flagship projects and acquiring the remaining ones. Key highlights:

  • Maintained BUY recommendation with a target price of HK$12.38.
  • Disposal of projects generated Rmb627.6m in profit.
  • Total consideration for the acquisition: Rmb15.4b.
  • Expected to benefit from continued landbanking in tier-1 and selected tier-2 cities.

Malaysia

• SKP Resources (SKP MK): Update with a BUY recommendation. The company clinched a game-changing contract and raised its target price from RM0.83 to RM1.20. Key highlights:
  • Top pick in the small-cap space.
  • Strong growth potential due to new contracts and market expansion.

Indonesia

• Telekomunikasi Indonesia (TLKM IJ): Results show broad-based growth in voice, SMS, and data. Key highlights:
  • 1Q15: Growth across all segments.
  • BUY recommendation with a target price of Rp3,565.

Singapore

• Sembcorp Industries (SCI SP): Results indicate earnings shrink further in Singapore, but overseas expansion continues. Key highlights:

  • 1Q15: Overseas expansion is a key growth driver.
  • BUY recommendation with a target price of S$5.10.

• Wilmar International (WIL SP): HOLD recommendation. 1Q15 results show positive crushing margins for oilseeds and grains, but sugar performance was disappointing. Key highlights:

  • Net core profit of US$263m (+23% yoy, -36% qoq).
  • Target price: S$3.65.

Thailand

• Big C Supercenter (BIGC TB): HOLD recommendation. 1Q15 earnings up 15% yoy due to higher other income and lower operating and interest expenses. Key highlights:

  • Target price: Bt234.00.

• LPN Development (LPN TB): BUY recommendation. 1Q15 net profit fell 60.7% qoq and 16.7% yoy to Bt292.1m, but in line with expectations. Key highlights:

  • 12.2% below consensus.
  • Target price: Bt23.10.

• Siam Global House (GLOBAL TB): BUY recommendation. Earnings recovered due to seasonal effects. Key highlights:

  • Target price: Bt11.40.

• Thaicom (THCOM TB): BUY recommendation. The company remains on a strong growth path. Key highlights:

  • Target price: Bt47.00.

Key Indices

Top Picks

Key Assumptions

Corporate Events

Analysts

• Renee Tai
  +852 2826 1324
  renee.tai@uobhayhian.com.hk

• Edison Bian
  +852 2236 6761
  edison.bian@uobkayhian.com.hk

• David Yang
  +8621 5404 7225 ext 801
  davidyang@uobkayhian.com

Summary

• Yonghui Superstores is a strong player in the modern grocery retail segment in China, with a focus on fresh food and a solid growth trajectory. The company's strategic alliances and expansion plans support its market leadership and profitability.
• Sunac China Holdings finalized its deal with Greentown, which is expected to enhance its exposure to the Yangtze River Delta and boost its financial performance.
• SKP Resources and Telekomunikasi Indonesia are highlighted for their growth potential in Malaysia and Indonesia respectively.
• Sembcorp Industries and Wilmar International are noted for their performance in Singapore, with the latter showing mixed results.
• Thailand companies like Big C Supercenter, LPN Development, and Siam Global House show varied performance, with some recovering and others facing challenges.
• The BUY recommendation is given to several companies, including Yonghui Superstores, Beijing Capital, and ICBC, while UMWH Holdings is a SELL.
• The document includes detailed financial forecasts, key metrics, and potential risks, providing a comprehensive view of market dynamics and investment opportunities.