20161006-大华继显-Regional_Morning_Notes_17页_1mb

报告摘要

Regional Morning Notes Summary - 06 October 2016

Core Content Overview

This document provides a summary of market highlights and investment analysis for several regions including Hong Kong, Indonesia, Malaysia, Singapore, and Thailand. It also includes financial details for IGG Inc (799 HK) and Bank Jatim (BJTM IJ), along with key indices, corporate events, and analyst insights.

Key Highlights by Region

Hong Kong

IGG Inc (799 HK):
- Lords Mobile is a new growth driver, generating US$17.8m in revenue within the first four months of launch.
- Dividend yield is expected to be about 5% in 2017, with a special dividend.
- Initiate coverage with a BUY rating and a target price of HK$5.66.
- The stock is trading at 13.3x 2017F PE, which is discounted to peers.
- Strong balance sheet with US$158.7m cash and zero borrowings as of end-Jun 16.
- High potential for growth with a CAGR of over 25%.
- Valuation based on 14.4x 2017F PE or 0.5x PEG.

Indonesia

Bank Jatim (BJTM IJ):
- Offers a high dividend yield of >6%.
- Trading at 1.1x 2017F P/B.
- Strong local presence, managing payroll for 420,000 civil servants.
- 65% of its loan portfolio consists of consumer and multi-purpose loans.
- Low cost of funds (COF) of 3.0% due to high CASA ratio (above 65%).
- NIM of 6%, driven by high-yield loans and low non-performing loan (NPL) ratio.
- NPL ratio stands at 4.6% as of 1H16, with plans to reduce it to 4.25% by year-end.
- Consensus expects 14% yoy earnings growth in 2016.

Key Indices

Index	Previous Close	1 Day %	1 Week %	1 Month %	YTD %
DJIA	18281.0	0.6	(0.3)	(1.1)	4.9
S&P 500	2159.7	0.4	(0.5)	(0.9)	5.7
FTSE 100	7033.3	(0.6)	2.7	2.2	12.7
AS30	5537.0	(0.6)	0.7	0.5	3.6
CSI 300	3253.3	0.3	(0.7)	(1.8)	(12.8)
FSSTI	2881.8	(0.1)	0.8	(0.5)	(0.0)
HSI	23788.3	0.4	0.7	0.0	8.6
JCI	5420.6	(0.9)	(0.1)	0.9	18.0
KLCI	1662.9	0.1	(0.1)	(1.6)	(1.7)
KOSPI	2053.0	(0.1)	(0.5)	(0.7)	4.7
Nikkei 225	16819.2	0.5	2.1	(1.5)	(11.6)
SET	1509.9	0.0	2.1	0.9	17.2
TWSE	9272.3	(0.2)	0.8	1.0	11.2
BDI	869	1.0	(4.7)	20.0	81.8
CPO (RM/mt)	2743	0.3	(4.5)	(2.4)	24.7
Brent Crude	52	1.9	6.5	8.9	39.1

Top Picks

Company	Ticker	Current Price	Target Price	Potential Upside (%)
Air China	753 HK	5.27	8.40	59.4
Ping An Insurance	2318 HK	41.25	47.00	13.9
Ciputra Property	CTRP LJ	630.00	960.00	52.4
Indosat	ISAT IJ	6,350.00	9,500.00	49.6
Genting Bhd	GENT MK	7.92	9.90	25.0
City Dev	CIT SP	9.10	10.36	13.8
OCBC	OCBC SP	8.68	10.30	18.7
Bangkok Dusit	BDMS TB	22.50	31.00	37.8
Siam Cement	SCC TB	528.00	645.00	22.2

Sell Recommendation:

Hartalega (HART MK): Target price of 3.10, with a potential downside of 35.4%.

Key Assumptions

Region	GDP Growth (% yoy)
US	2.6, 2.0, 2.7
Euro Zone	2.0, 1.4, 1.0
Japan	0.5, 0.6, 0.8
Singapore	2.0, 2.2, 2.4
Malaysia	5.0, 4.2, 4.5
Thailand	2.8, 3.2, 3.5
Indonesia	4.8, 5.0, 5.2
Hong Kong	2.4, 2.1, 1.8
China	6.9, 6.5, 6.2

Brent Crude (Average):

2015: 53.60 US$/bbl
2016F: 42 US$/bbl
2017F: 54 US$/bbl

CPO (RM/mt):

2015: 2,168
2016F: 2,500
2017F: 2,600

Corporate Events

Event	Venue	Start Date	End Date
Singapore Banks, Singapore Telcos and ASEAN Banks Analyst Presentation	Kuala Lumpur	6 Oct	7 Oct
Xtep International Holdings Roadshow	Taipei	7 Oct	7 Oct
Xtep International Holdings Roadshow	Kuala Lumpur	15 Nov	15 Nov
Asian Gems Conference 2016	Singapore	11 Oct	12 Oct
China Harmony New Energy Auto Holding Luncheon	Hong Kong	12 Oct	12 Oct
Joy City Roadshow	Shanghai	13 Oct	13 Oct
Nameson Holdings Luncheon	Hong Kong	13 Oct	13 Oct
Metro Pacific Investments Roadshow	Canada	24 Nov	25 Nov
KL Kepon Site Visit	Malaysia	25 Oct	25 Oct

Key Metrics for IGG Inc

Metric	2015	2016F	2017F	2018F
EBITDA margin	25.7	22.3	25.1	28.2
Pre-tax margin	22.2	20.9	24.0	27.0
Net margin	20.2	18.9	19.9	22.4
ROA	18.7	25.3	28.0	28.8
ROE	21.7	29.7	33.4	34.4
Turnover (%)	-1.0	51.8	12.4	-5.2
EBITDA (%)	-26.0	31.6	26.8	6.4
Pre-tax profit (%)	-37.3	43.3	28.8	6.6
Net profit (%)	-38.3	41.8	18.3	6.6
Net profit (adj.) (%)	-38.3	41.8	18.3	6.6
EPS (cent)	-	45.1	18.3	6.6

Peer Comparison (Selected)

Company	Ticker	PE (x)	P/B (x)	PE/CAGR FY15-17F (x)
IGG Inc	799 HK	22.0	4.9	0.46
Boyaa	434 HK	6.6	1.6	0.24
Tencent	700 HK	50.7	12.5	0.90
Netdragon	777 HK	n.a.	2.9	n.a.
Kingsoft	3888 HK	37.2	2.7	0.46
Ourgame	6899 HK	21.2	2.4	0.28
Linekong	8267 HK	n.a.	1.2	n.a.
DeNa	2432 JT	36.6	2.8	0.48
Nexon Co	3659 JT	28.0	2.1	5.95
Gungho	3765 JT	7.0	2.4	(0.33)
NetEase	NTES US	23.5	6.7	0.51
Youzu Interactive	002174 CH	42.8	9.8	1.15
Kingnet Network	002517 CH	29.2	28.7	2.02
Shenzhen ZQgame	300052 CH	88.9	4.9	n.a.
Ourpalm	300315 CH	34.9	3.2	0.43
Beijing Kunlun Technology	300418 CH	69.4	10.7	1.06
Sichuan Xun You Network	300467 CH	133.2	18.6	1.6
NCSoft Corp	036570 KS	28.4	3.8	0.39
Nexon GT	041140 KS	n.a.	2.2	n.a.
Gungho	3765 JT	7.0	2.4	(0.33)
NetEase	NTES US	23.5	6.7	0.51
Youzu Interactive	002174 CH	42.8	9.8	1.15
Kingnet Network	002517 CH	29.2	28.7	2.02

Summary of Key Points

Main Points:

IGG Inc (799 HK):
- Lords Mobile is a key growth driver.
- Strong financials with a high net margin and positive cash flow.
- Trading at 13.3x 2017F PE, which is discounted to peers.
- BUY recommendation with a target price of HK$5.66.
- High dividend yield expected, including a special dividend.
Bank Jatim (BJTM IJ):
- Offers a high dividend yield of >6%.
- Strong local presence and low cost of fund.
- 65% of its loan portfolio consists of consumer and multi-purpose loans.
- Maintains a high NIM of 6% and ROE.
- NPL ratio is a key concern, currently at 4.6%.
- Trading at 1.1x 2017F P/B, slightly above its historical average.

Market Overview:

The DJIA and S&P 500 showed positive performance.
The FTSE 100 had a moderate increase in the past week.
China and Indonesia have strong GDP growth expectations.
Brent Crude and CPO have shown positive trends in the past year.

Risks and Catalysts:

Risks:
- Weaker-than-expected performance from hit games.
- Faster-than-expected decline in existing title revenues.
- Failure to produce the next hit game.
- Lower-than-expected special dividend.
Catalysts:
- Inclusion in the SZ-HK Stock Connect list.
- Better-than-expected performance from Lords Mobile.
- Release of a new hit title.
- Higher-than-expected dividend payout ratio.

Conclusion

The report highlights IGG Inc as a promising investment with a BUY recommendation due to its strong financial performance, growth in Lords Mobile, and dividend potential. Bank Jatim is also noted for its high dividend yield and strong local government ties, despite NPL concerns. The overall market sentiment is positive, with growth expectations across several regions.