20150923-大华继显-Regional_Morning_Notes_22页_1mb

报告摘要

Regional Morning Notes Summary

Core Content

This document provides a detailed analysis of the Asian regional markets, focusing on the aviation sector and home appliances industry, particularly in China, as well as updates on Holcim Indonesia and other market participants.

Main Points

Aviation Sector

Impact of Weak Exports: Asian air carriers are affected by weak export performance, but Chinese carriers (such as Air China, China Southern Airlines (CSA), and China Eastern Airlines (CEA)) show greater resilience due to increased exposure to the US market, where economic conditions are more stable.
Cargo Traffic and Yields:
- Cargo traffic growth has been mixed, with CX and SIA being most vulnerable.
- Cargo yields are expected to decline further in the second half of 2015 due to overcapacity, weakening demand, and low fuel prices.
- EVA Air and China Airlines have seen significant yield declines (10.9% and 11.6% respectively) in July and August 2015.
- CEA has a lower exposure to the US and is less flexible due to not operating dedicated freighters, leading to lower cargo performance.
Sector Upgrade: The aviation sector is upgraded to MARKET WEIGHT, with Air China, CSA, and CEA recommended as BUY.
Load Factors:
- CX and SIA have seen declines in load factors.
- Chinese carriers have the lowest load factors, but their cost structure allows for less impact on earnings due to lower fuel costs and bellyhold cargo.
Market Outlook:
- SIA and CX are recommended as HOLD due to limited upside.
- Chinese carriers are expected to outperform due to strong macro fundamentals and growth potential.

Home Appliances Industry

Sector Outlook: The home appliances sector in China is initiated for coverage with an OVERWEIGHT rating.
Growth Potential:
- Leading Chinese home appliance companies are expected to achieve double-digit earnings growth over the next five years.
- Market share in intelligent appliances is expected to rise to over 90%.
Valuation: The sector is undervalued at 9.2x 12-month forward PE, compared to 18x and 21x for A-shares and globally-listed peers.
Top Picks:
- Skyworth Digital (751 HK): Recommended as BUY, with a target price of HK$8.16 (63.9% upside).
- TCL Multimedia (1070 HK): Recommended as BUY, with a target price of HK$5.89 (60.4% upside).
- Haier Electronics Group (1169 HK): Recommended as BUY, with a target price of HK$21.74 (57.1% upside).
Key Drivers:
- Smart TV is the future of the industry, with over 70% of TV shipments in 2015 being smart TVs.
- Smart TV services revenue includes advertising, media content, gaming, shopping, and travel.
- Online sales are gaining traction due to larger SKU, faster updates, and transparent pricing.
Market Penetration:
- TV ownership in China is below that of developed countries, with 125 TVs per 100 households.
- Urban vs. Rural Penetration: 115% vs. 70%.
- Faster replacement cycles due to increased focus on energy efficiency and modern features.
Risks:
- Weaker consumer sentiment.
- Intensifying competition from Internet brands.

Key Companies and Updates

Holcim Indonesia (SMCB IJ)

Performance:
- Recorded a net loss of Rp138b in 1H15, below forecasts, due to high restructuring costs, delivery costs, forex loss, and rising distribution costs.
- Target price cut to Rp1,110 from previous levels.
Earnings Outlook:
- Expected to normalize in 2016 with improved cement demand, better efficiencies, and debt refinancing.
- Sales recovery in August 2015, with 900,000 tonnes of domestic cement sales.
- 1H15 sales increased by 1% yoy, outperforming the sector due to exposure to West and Central Java.
Financials:
- Net profit (adj.) in 2015F is (Rp16), but expected to improve in 2016.
- EBITDA in 2015F is Rp1,108b, with a target of Rp2,110b in 2016F.
- Dividend yield is expected to be 5.0% in 2016F.

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	16330.5	-1.1	-1.6	-0.8	-8.4
S&P 500	1942.7	-1.2	-1.8	-1.4	-5.6
FTSE 100	5935.8	-2.8	-3.3	-4.1	-9.6
AS30	5130.8	0.7	1.7	-1.8	-4.8
CSI 300	3339.0	0.9	5.9	-7.0	-5.5
FSSTI	2868.5	-0.5	0.9	-3.5	-14.8
HSCEI	9835.4	-0.6	1.4	-3.5	-17.9
HSI	21796.6	0.2	1.6	-2.7	-7.7
JCI	4344.0	-0.7	-0.1	0.2	-16.9
KLCI	1635.4	-0.3	-0.3	3.9	-7.1
KOSPI	1982.1	0.9	2.3	5.6	3.5
Nikkei 225	18070.2	-2.0	-1.1	-7.0	3.5
SET	1379.3	-1.0	0.6	1.0	-7.9
TWSE	8365.9	0.7	1.3	7.4	-10.1
BDI	923	-5.6	15.1	-7.1	18.0
CPO (RM/mt)	2026	0.9	-1.3	5.4	-11.8
Brent Crude	49	0.3	5.3	8.0	-14.4

Top Picks

Company	Ticker	Recommendation	Share Price (HK$)	Target Price (HK$)	Upside (%)
Air China	753 HK	BUY	6.16	10.40	62.4
China Eastern	670 HK	BUY	4.61	8.20	17.4
China Southern	1055 HK	BUY	5.63	7.70	36.8
Skyworth	751 HK	BUY	4.98	8.16	63.9
TCL Multimedia	1070 HK	BUY	3.67	5.89	60.4
Haier Electronics	1169 HK	BUY	13.84	21.74	57.1

Analysts

K Ajith: +65 6590 6627 | ajith@uobkayhian.com
Sophie Leong: +65 6590 6621 | sophieleong@uobkayhian.com
Frank Xu: +852 2236 6794 | frank.xu@uobkayhian.com.hk
Cindy Lam: +852 2826 4867 | cindy.lam@uobkayhian.com.hk

Key Risks and Assumptions

Assumptions:
- No changes to assumptions.
- Weaker-than-expected pax yields.
Risks:
- Holcim Indonesia: Weak consumer sentiment, increased competition.
- Aviation Sector: Continued weakness in exports, lower pax yields.

Conclusion

The aviation sector in Asia is showing mixed performance, with Chinese carriers outperforming due to US exposure and bellyhold cargo advantages. SIA and CX are more vulnerable due to higher cargo exposure and declining load factors. The home appliances sector in China is initiated for coverage with an OVERWEIGHT rating, driven by growth in smart appliances and online sales. Holcim Indonesia is expected to normalize earnings in 2016 due to improved efficiencies and demand.