20170809-大华继显-Regional_Morning_Notes_26页_1mb

报告摘要

Regional Morning Notes Summary - 09 August 2017

Core Content Overview

This document provides a detailed analysis of stock performance and financial outlook for several companies in China, Indonesia, Malaysia, and Thailand, as well as key indices and corporate events for the week of 09 August 2017. The focus is on small and mid-cap stocks, particularly highlighting CDOT (China Display Optoelectronics Technology) and Gudang Garam (Indonesia's largest cigarette producer), with recommendations and target prices provided for each.

Key Companies and Their Performance

China Display Optoelectronics Technology (334 HK)

Sector: Information Technology
Recommendation: BUY
Current Price: HK$1.09
Target Price: HK$1.40
Upside: +28.4%

Highlights:

1H17 Results:
- Revenue increased by 3.3% yoy to Rmb1.5b.
- Sales volume dropped 35.8% yoy to 21.3m pieces due to the global smartphone market's shift to full-screen displays.
- ASP (Average Selling Price) rose 60.8% yoy to Rmb70.30/piece.
- Gross margin increased 6.4ppt yoy to 9.5%.
- Net profit surged 15.8x to Rmb67m.
2H17 Outlook:
- Management expects sales volume to rebound and net profit to grow due to the high season and product upgrades.
- Guidance for 2017 net profit is 14% higher than previous forecasts.
Financials:
- 2017F Net profit: Rmb151.0m
- 2017F EPS: 8.1 fen
- 2017F PE: 13.5x
- 2017F P/B: 5.0x
Valuation:
- Maintained BUY based on 14.8x 2017F PE, above historical mean.
Catalysts:
- Continued product upgrades, including LTPS and in-cell technologies.
- Expansion into new premium smartphone clients through its joint venture with Wuhan CSOT.
- Full-screen display trend is expected to drive ASP and revenue growth in 2018.

Gudang Garam (GGRM IJ)

Sector: Consumer Staples
Recommendation: HOLD
Current Price: Rp68,800
Target Price: Rp74,000
Upside: +7.6%

Highlights:

2Q17 Results:
- Daily net income increased by 23.4% yoy, but fell 34.7% qoq to Rp1,234b.
- Revenue grew 6.9% yoy to Rp20,275b.
- Operating margin dropped from 13.86% to 8.92% due to higher operating expenses, including Lebaran bonus and promotion costs.
1H17 Results:
- Net income rose 8.9% yoy to Rp3,125b, in line with expectations.
Financials:
- 2017F Net profit: Rp7,520b
- 2017F EPS: Rp3,908.4
- 2017F PE: 17.6x
- 2017F P/B: 2.8x
Outlook:
- 1H17 net income is in line with expectations.
- 2Q17 net income growth is likely to be below 15% due to high hurdle rate in 2H16.
Segmental Performance:
- Cigarette segment: Revenue grew 9.1% yoy, profit grew 1.8% yoy.
- Paperboard segment: Profit surged 294.6% yoy, though revenue growth was minimal.
- Others: Revenue grew 10.5% yoy, but segment profit declined by 13.7%.

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	22085.3	(0.1)	0.6	3.1	11.8
S&P 500	2474.9	(0.2)	(0.1)	2.1	10.5
FTSE 100	7542.7	0.1	1.6	2.6	5.6
AS30	5795.7	(0.5)	(0.4)	0.9	1.3
CSI 300	3732.2	0.1	(1.0)	2.1	12.8
FSSTI	3318.1	(0.1)	(0.6)	2.8	15.2
HSI	27854.9	0.6	1.1	9.9	26.6
KLCI	1781.7	0.2	0.9	1.2	8.5
Nikkei 225	19996.0	(0.3)	0.1	0.3	4.6
SET	1577.4	0.2	0.1	0.5	2.2
TWSE	10569.0	(0.1)	1.3	2.6	14.2
BDI	1038	0.2	7.6	26.3	8.0
CPO	2583	(0.7)	(2.3)	(2.2)	(19.3)
Brent Crude	52	(0.4)	0.7	11.6	(8.2)

Top Picks

Ticker	CP (lcy)	TP (lcy)	Pot. +/-
Alibaba	157.50	173.00	9.8
Beijing Ent. Water	6.54	7.60	16.2
Ace Hardware	1,085.00	1,300.00	19.8
Waskita Karya	2,280.00	3,350.00	46.9
Ekovest	1.12	1.55	38.4
OCBC	11.20	13.38	19.5
Siam Cement	486.00	600.00	23.5

Sell Picks:

Ticker	CP (lcy)	TP (lcy)	Pot. +/-
Great Wall Motor	10.34	6.00	(42.0)
Sapura Energy	1.49	1.38	(7.4)

Corporate Events

Analyst Marketing on Chinese and Singapore Banking: Brunei, 14 Aug
Analyst Marketing on Singapore Small & Mid Caps: Malaysia, 14-15 Aug
Analyst Marketing on Greater China Strategy: Brunei, Singapore, Kuala Lumpur (14-17 Aug)
Analyst Presentation on Malaysia Technology Sector: Taipei, 22-23 Aug
Roadshow with Logan Property Holdings: Taipei, 23 Aug
Roadshow with China TCM Holdings: Hong Kong (24 Aug), Shanghai (28 Aug)
Roadshow with Globetronics Technology: Taipei, 24 Aug; Hong Kong, 12 Sep
Roadshow with Meidong Auto Holdings: Hong Kong (25 Aug), Hong Kong (28 Aug)
Roadshow with Anta Sports Products Ltd: Shanghai, 5 Sep
Roadshow with Top Glove Corporation: US/Canada, 5-12 Sep
Roadshow with Health Management Int'l: Kuala Lumpur, 6 Sep
Asian Gems Conference 2017: Singapore, 10-11 Oct

Key Assumptions

Region	GDP (% yoy) 2016	GDP (% yoy) 2017F	GDP (% yoy) 2018F
US	1.6	2.5	2.5
Euro Zone	1.7	1.8	1.6
Japan	1.0	0.9	1.2
Singapore	2.0	2.4	2.5
Malaysia	4.2	5.0	4.9
Thailand	3.2	3.3	3.3
Indonesia	5.0	5.2	5.5
Hong Kong	1.9	2.0	2.0
China	6.7	6.6	6.3
Brent (Average)	45	55	58
CPO	2,653	2,600	2,400

Conclusion

The document outlines a positive outlook for CDOT, with a BUY recommendation based on strong product upgrades and expected growth in full-screen and LTPS modules. Gudang Garam, on the other hand, is recommended to HOLD due to its weak performance in 2Q17 and a high hurdle rate. The overall market sentiment is cautiously optimistic, with various corporate events planned to enhance visibility and investor engagement. Key indices show mixed performance, with some regions showing stronger growth than others.

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